Lots of people are talking about the yen today, in addition to bonds, the dollar and gold. For that matter, many are feeling ebullient about bullion.* So let's take a look at all four of these. First, as to gold, it still retains the bullish option as Tony Caldaro has marked in his Objective Elliott Wave - in fact, I've measured out that it could get to 850 (that pivot as marked on the weekly chart and no too far from its 200-day moving average) or even a quick poke down to about 846; and still be in a corrective pullback wave 2 in Tony's count - prior to a sizable wave 3 up. Or the view can be my more bearish one, that gold completed a large (B) or (X) wave up and starting on wave (C) or (Y) down. Perhaps there are other alternatives but these are the main two of which I'm aware. So, if gold does weaken further, then we can look to the levels on the weekly chart where the 50-month moving average, the Bollinger Band 20-month MA midline, and my uptrend channel trendline may give support. If those don't do the job and it falls under 850 and then 846, we can look to see whether the wave 2 idea could still have some room to go or otherwise that the bearish view is in force.
Of course we must look at the dollar chart. Yes, it's a bit busy (not as much as my VIX chart, which I think I've marked a few too many lines on!), but it's interesting that it hugged up to that one trendline it recently moved under. If you look back at my recent post here about the dollar, you know that I'm trying to remain open to different alternatives. Naturally, the idea of another wave up in the dollar - perhaps a delightful diagonal fifth wave - would fit nicely with the idea of a (C) or (Y) wave down in gold. If it works out that neatly I'll be delighted, but maybe it just seems too easy ... alternatively, if gold pushes above 1007 and the dollar drops more, then we'll need to work with patterns that are more bullish gold and bearish the dollar. But I'm not going to count on that for now, since the indicators can be interpreted in favor of my primary view, and there are cycle reasons to think that gold's put in some level of a high with the converse true in the dollar.
Bonds can have put in the opening rally of the C-wave up that Tony Caldaro expects and that I've had in mind as well. Actually I'm not 100% certain of how he derives his C-wave count; mine is based primarily on a huge Elliott Wave diagonal that, as best I can determine, "needs" one final C-wave up to be complete. We'll see, of course. Yes, the indicators do look weak - but that can be the case with a final rise up, it would be just the negative divergence that would help confirm the outlook. If that diagonal idea is true, then once bonds top out "again," look out! (Probably goes along real well with the types of news we see today, with the Fed/Treasury/big boyz having to step in and rescue - er, buy bonds today, and now Janet Yellen being quoted on Bloomberg as saying that the Fed may have to issue its own bonds down the road ... yikes!) [By the way, it's very understandable that foreign holders of U.S. debt are doubly concerned if they think both bonds AND the dollar have further weakness ahead - they must have been delighted during 2008 when both were marching up.] But let's take it one day and one week at a time. Obviously, to keep this view in play for now, bonds will have to avoid making a new low here.
Readers here know that since mid-January, I've thought that the $XJY chart would move to higher levels. Then it broke to the downside out of what looked like a triangle, thus becoming a "triangle trap" - and it moved down to the Elliott Wave projection I described for a flat C-wave. That level put in the low - for now - and its movement since then looks like it can be an opening rally similar to what bonds have done. (Probably not a coincidence given how both have moved since December.) There's discussion about it getting to 117, but my projections on the monthly chart suggest it can move even more than that. Again, we'll see - right now, like bonds, $XJY just needs to avoid slipping to a new low here. Obviously this is interesting juxtaposed against the possibilities in the dollar chart. During 2008 both $XJY and the dollar were moving up, then since December they parted ways and $XJY started to move like the US Treasury bonds chart (for that matter, like VIX too). If $XJY breaks down under the 200-day moving average as shown on the chart below, then one of the primary objective levels I've got for it is approximately 83.
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*Interestingly, the Wiktionary page about the word "ebullient", at http://en.wiktionary.org/wiki/ebullient, explains that it's from the Latin word 'bullire', meaning "to bubble up". Hmmm - and here we thought all along that being bullish was simply a matter of the medieval practice of actually having bull vs. bear fights and picking sides in the market with such animism!
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