Hi Slum,
The USD is undeniably weak....... but we have seen a low of 92.52 back in Sept 2015, and we had an even lower low @91.88 in early May of 2016. Granted these are the lowest closes we have seen in the USD since we set up this Wychoff range almost 3 years ago.
And the Momentum lows indicate a problem. First of all the the momentum is showing really intense selling pressure
2) We are not seeing a basing pattern in price, nor are we seeing a really proper momentum divergence for any really meaningful rally so far.
Here is a post where I outline what the USD is doing on a weekly and Monthly basis.... as well as outline
fundamental concerns as to the lack of Congressal action on anything.
I just was writing to Don Green and he right now feels that stocks have entered a new era where they can not go down and stocks like AMZN and TSLA will never come back to earth orbit.....
while simitaneously, the USD , US political leadership and other aspects of our economic situation continue to deteriorate......
I was reading a book on the 1986-87 era and how there would be Japanese institutional investors would show up week after week and they would have large sums of money to invest into the US markets.... and then at some point they stopped coming to reinvest and the market topped out.
This protracted USD weakness.... should be ringing a big huge caution bell........ is it? There seems to be no concern whatsoever.
Here is a reprint of a post from a few days ago.......
| To: Don Green who wrote (19629) | 7/29/2017 10:48:56 PM | | From: John P | 3 Recommendations of 19660 | | | Hi Don,
I will do some updated analysis on the USD/JPY relationship is essential and demonstrates a significant insight as to what could happen in global currency terms to destabilize our current economic structure.
here is a comment I made on the 2001 thread.......
To: elmatador who wrote (407)7/29/2017 9:12:00 PMFrom: John P of 408Hi El, this was my comments from Tuesday..... the USD is actually working it's way into some more significant support as can be seen on this 3 year Wyckoff chart
The USD is getting down to support levels that have held over the past few years and the RSI and other rate of change oscillators are starting to show some momentum exhaustion to the downside... which sets up a rally possibility..... the quality and momentum of the rally as well as the sentiment will tell us much as to what the USD
is going to be doing over the next 6 months.
JP
To: The Ox who wrote (19578) | 7/24/2017 1:10:16 PM | | From: John P | 2 RecommendationsRead Replies (1) of 19633 | | HI Ox, The USD has failed miserably at every rally attempt this year.
back In Jan and Feb, DJT was adamant that he wanted to see a lower USD and that is exactly what he has gotten.
The 45 year Monthly USD index with Fibs
on a long basis the USD is coming back to the downtrendline it has broken out of several years ago. The key ..78 retracement is providing some support in the bigger picture as is the 50 month moving average...
but the shorter term techical action in USD is very bad, the EUR/ USD look like it want to go to 1.18 which is it's 200 week Moving average.as well as being a cluster of shorter term Fibonacci calculations.
The 10 year weekly EUR/USD Look at the tremendous bullish momentum on the RSI Moving average trading system.
The 25 year USD monthly chart with Fibonacci ratio's
The 10 year weekly USD index with Fib ratios
Hi Ox, Those cyclical influences are real and significant... if we see a real dust up with no Health care legislation, coupled with nothing on tax reform and a real impasse on increasing the debt ceiling..... could really create negative psychology. There is always issues with DJT and his combative administrative "twitter war" style coupled with his family not really extricating themselves from a very large portfolio of actively managed companies and assets that can present potential conflicts of interest....
I have some cycle work that has us potentially moving sideways later into the summer then a more classic seventh year decennial pattern "panic" which could unfold in late September and October.
3 and 4 months ago I saw institutional fund managers from 6 or more firms that wanted long European and emerging stock market exposure and they were to a manager talking about using Futures to obtain the overseas stock exposure ... while at the same time they felt it would insulate them from weakness it foreign currencies. That right there was an excellent tell that there was too much bullishness on the USD as we have seen protracted and ongoing weakness since the USD high in Dec of 2016.
The USD has not had a decent rally this entire year and we moved very quickly from the 80 area a few years ago up into the mid 90's...... It's very naive to underestimate the potential for dollar weakness with the litany of
4 key legislative issues that the Republicans have been entirely unable to deal with.
1) Nothing legislatively being done to stablize health costs
2) With no anchor on Health care spending costs, it makes larger and broader tax reform effectively impossible
3) the Tea Party and conservative factions that do not want to sign blank checks on unlimited debt ceiling increases.
4) Political vulnerability in the DJT admin from his lack of political adroitness in dealing with the media, this coupled with the conflict of interest concerns between his business affairs and his adult sons who are managing active assets that can be seen as a conflict of interest. It has been highly unprecedented for a president to not put his assets into a blind trust and DJT and family have many, many assets that require active management, as contrasted with a relatively passive portfolio of large cap stocks, fixed income assets.... that are more typically what has been in 20th century president blind trust portfolios.
John |
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