Many markets do seem to be moving contra the US dollar, although not all of them. But the inverse trade seems to be working right now for gold, euro, yen, oil, gasoline, and many stock markets including those in the United States. I'd pointed out Tuesday evening that gold would probably try to make a low on Wednesday, and that type of action did seem to apply also for oil, gasoline, euro, and the SPX and other equities indices. Now we should start seeing if there's some bounce (or more) in many of these. It may have to do with cycles, or just the typical timing of these things. But looking at the Bloomberg's (mobile site) Americas, futures at http://mobile.bloomberg.com/markets/americas.html, indicates that indeed it seems time for buyers to show where they can take the markets. If all they can manage is a moderate bounce with low volumes, that will be a clue for swing traders that a larger-level (trend-reversing) correction is underway.
Now we'll also be looking for divergences. One is the yen, which actually started its bounce a few days ago. If the yen is trend-reversing, then I'd expect it to start moving lower again very soon. But I'm not convinced about the yen moving much lower. Especially if we get the dollar weakening, that should normally help support the $XJY (FXY) yen. Even though it dropped smartly, its bigger picture suggests that it should regain and stay over the 111.49 $XJY (FXY) Fibonacci pivot. If it cannot, then perhaps something more bearish for the yen is unfolding after all.
Also, speaking of cycles, and responding to comments - don't forget that the ChartsEdge maps are merely snapshots of cycle projections using different methods, and are more robust when they "agree". Remember, their full week-ahead look suggested strength later in the week. Besides, I personally (speaking for myself) think they are more subject in the afternoons to being overtaken by event bias - that's just my thought. Put that together with my thoughts on the likely pattern of the dollar and the "dollar-inverse" markets going into some consolidation as started yesterday. So just take that as it plays out and look for signs of whether any of these show real strength on a reaction today/tomorrow.
Now we'll also be looking for divergences. One is the yen, which actually started its bounce a few days ago. If the yen is trend-reversing, then I'd expect it to start moving lower again very soon. But I'm not convinced about the yen moving much lower. Especially if we get the dollar weakening, that should normally help support the $XJY (FXY) yen. Even though it dropped smartly, its bigger picture suggests that it should regain and stay over the 111.49 $XJY (FXY) Fibonacci pivot. If it cannot, then perhaps something more bearish for the yen is unfolding after all.
Also, speaking of cycles, and responding to comments - don't forget that the ChartsEdge maps are merely snapshots of cycle projections using different methods, and are more robust when they "agree". Remember, their full week-ahead look suggested strength later in the week. Besides, I personally (speaking for myself) think they are more subject in the afternoons to being overtaken by event bias - that's just my thought. Put that together with my thoughts on the likely pattern of the dollar and the "dollar-inverse" markets going into some consolidation as started yesterday. So just take that as it plays out and look for signs of whether any of these show real strength on a reaction today/tomorrow.
Futures | ||
| Dow | 10,354.00 | 24.00 |
| S&P 500 | 1,099.40 | 3.80 |
| NASDAQ | 1,797.25 | 4.75 |
| S&P/TSE | 676.00 | 0.70 |
| Mexico Bolsa | 32,000.00 | -10.00 |
| Brazil Bovespa | 68,152.00 | 415.00 |
Currencies | ||
| EUR-USD | 1.47 | 0.00 |
| USD-JPY | 88.34 | 0.48 |
| GBP-USD | 1.63 | 0.01 |
Commodity Futures | ||
| Oil | 70.99 | 0.32 |
| Gold | 1,124.50 | 3.60 |
| Natural Gas | ||
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