Dollar decline nearing an end?

You use the indicators then to confirm EWT? Are there any times when it is the other way around or that the EWT is not used?

 

Actually the EW is the primary factor.
If the technicals are there to support it ... great.
If not, that's okay too. The technicals then usually follow.

Do I ever go by technicals alone? Not a chance

 

IMHO, the commodities were going up in relation to agitation over the dollar and anticipation of a potential dollar collapse.

G7 & IMF strategies for stabilizing the dollar relative to the euro and yen were announced this week. Go to this thread where some I posted some interesting articles (b4 they 'disappear').

http://www.elitetrader.com/vb/showthread.php?s=&threadid=67855

I agree with you now that things are over for a while and expect to see gold get punished... silver might have been punished enough already. Buying oppt, in my opinion.

If you look at the USD/JPY and EUR/USD rates, you can see that there really hasn't been THAT much fluctuation. USD/JPY at current levels is back to where it was in January. However, if you take a look at the EUR/JPY cross below, you will see that the big move has actually been there, and this may be the first sign of that unwinding from the cross hitting what has pretty much been a 4-5 year high in EUR/JPY.

Interesting times, y'all. Anyone man enough to go negative gamma in oil?

 

Good point. And you got me there because I am not sure about the causal relationship between the $/Euro and oil and gold. Many think that oil occasionaly rallies to make up for the declining value of the dollar but that seems a little exagerated when you take a look at the percentage difference between $/Euro declines versus oil price increases. I'd be happy if I you or anybody else would elaborate on that.

 

Ok. Thanks--just wanted to understand your analysis a bit more.

 

The quick answer is that when people get nervous about the USD, they tend to move into 'hard' assets such as commodities, mining stocks, lumber, or 'stable' currencies such as the Nord or Euro. Same idea with real estate, although that ship has long left the harbour.

It is sometimes instructive to look at GLD/USD and GLD/CHF (or GLD/EUR). GLD/CHF in particular is, in my opinion, a true measure of the value of gold - the value of an ounce of the stable physical vs. a most stable currency.

http://www.gold-eagle.com/goldcorner/goldswiss.html

Sorry - this is getting way off topic.

 

Anything that is informative is never off the topic ... thx DOC

 

Thanks Steph. That was a simple but solid explanation, just the way I like it.

 

I just would like to point out that the fundamental issues that are calling for a lower dollar are not all that different than the fundamental issues call for the same exact thing back in December 2004 when the Euro hit 1.36 and change.

I remember forecasts of 1.50 and the like, amidst dollar bears chanting that the USD had no choice but to go lower.

I'm not saying this is the case this time, but I usually raise an eyebrow when everyone and their mother begins shorting the USD.

 

Yes, remember many of those forecasts. Including by some supposed big players.

If it can fill that opening gap I feel we'll definitely move higher. Many technicals in place for a resumption of the bull market. And, now there is even a target.