The dollar and LT bonds. Several comments have recently been made about these, by various. W/r to the first it is time to go back to this chart, reference:#msg-24492961.
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It is too early to see if the dollar responds inline with the view shown, but the chances in my opinion still look good. If it does the strengthening dollar may coincide with a global recession of 'Shilling' prediction, i.e. the worst since '29.
And if this view holds we think it possible the dollar will be rising with bond price(s). This may seem strange, but if the US sneezes all the rest will catch influenza, so it will be the best of the lot. Additionally we think the LT bond price is completing its first retrenchment of a break out wave that has some years yet to run (Bond prices have not yet topped, our opinion). And if the US sneezes or worse, Ben will cut LT rates further. Shilling for example a long time ago predicted a bottom in the 30 yr in the 3.5 range. Based on LT Dpoint charts, that view looks entirely reasonable.
The dollar chart shown was not long ago posted on a Prechter and Frost EW type board. The immediate comment received was 'That ain't Elliott'. Well pardon TheFalcon, but he never stated it was. Truth be known TheFalcon gave up on Prechter and Frost EW a long long time ago, at least as practiced by SI P&Frost gurus. Prechter in my opinion has had his day in the sun, and has been lost for a long time. He will likely find himself again soon, as we all do. The reason for all this on my part was simple, by observation it was obvious that most (including me) would get totally lost within any correction (mostly stated with reference to the HUI). If one is lost most of the time, there has to be something better.
So what have we been following ... well, Neowave. It is no panacea either, as the key problem with Neowave is that it is extremely complicated, and the literature available is minimal. We have seen others on SI and elsewhere try to replicate, mostly imo with failure.
It is too early for me to see how this turns out, for me. I am certainly not against progress, and I think it possible and likely Neowave represents such. But I can also assure everyone, Neowave is no magical answer. It is just too abstract and complicated, for but only a few to really get a grasp on it. To be honest as well I am not all sure my grasp is anything but in the beginning stages.
With that, where is Neowave today, after calling a perfect gold and SPX top? They are extremely bearish, and anticipate a down move is in progress, that will go below the '02 bottoms. This correction will run 4 to 6 years.
It is best to not be married to someone else's prediction, for sure. So beware.
Following is a bearish possibility put together by TheFalcon, on The DOW (Neowave does do DOW so I could not copy). I have not used Neowave labeling, simply because I am not good enough to do so. So my labeling is more reflective of classical EW.
If one studies Neowave to any extent they will immediately realize that per this approach not every upwave with trend is an impulse. In fact few are. That principle is reflected in this wave count. The markets are actually correcting most of the time, and corrections can run with trend. Impulses are rare birds, and there is a litmus test for such a wave.
A final comment is that per some of the principles espoused within Neowave it would not be improper or unusual to see the whole vth of 3 (as labeled) to be given back. That could crank the DOW back to the 4000 level, and the SPX back to the 500 level. Wow, Shilling could go for that as well.
The wave count shown has the DOW doing an impulse up and topping in '29. The next impulse, a 3rd wave, did not start until late '82, and topped in late '99. Since then The Dow has been in a correction, and this wave down would/should be the worst. Per Neowave however the C wave shown here is not normally an ending wave, within a major correction. There would be more to come, but the worst would be over.
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TheFalcon is not trying to pump this view, just lay it out as a possibility. This being a market laboratory of sorts type of board should make that okay. On the other hand Neowave has been too accurate in their predictions, for some years now, to ignore. Additionally if this view has merit it would appear we are at a crucial juncture, as well .... or in other words a major leg down should commence very soon. If it does, one might expect it to last into late year, and take the SPX down to 1100 or below. Following that we would expect a rebound in soize, before the real killer move down commences.
TheFalcon is still a LT gold bull as well. We will see how it goes here, but we think gold is in a major correction, in fact an impulse like wave down. If so it will go deep, much deeper than hardly any gold buff on SI believes .... but it will be the last down move for years to come. The next phase of the market, following the current correction, if this comes to pass, will likely be dominated by metals.
TF
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