By Poly

This is an excerpt from this weeks premium update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly. Now offering monthly & quarterly subscriptions with 30 day refund. Promo code ZEN saves 10%.

Cycle Count Observation Probable Outlook Cycle Clarity Trend
Daily Day 7 Range 18-22 Days – 3rd Daily Cycle     Caution
Green Down
Investor Week 9 Range 18-22 Weeks  Caution Green Failed
3Yr Month 16 Range 36-42 – 6th Investor Cycle. Bullish Green Up

On the surface, it would appear with this massive surge as if the dollar is making a really significant Cycle’s statement here. But this is just an inherent problem with the Dollar index because of the extreme weighting given to the Euro. At well over 50% of the index, ECB president Draghi’s dovish comments on Thursday sent the Euro down sharply and therefore the dollar index spiking.

Although we have a high that exceeded the prior Cycle high, the timing is still correct and a downturn (Cycle Top) should be imminent. I’m partially discounting the dollar index strength because I know the move is largely Euro weakness.  Because of the Euro weakness, I really doubt we’re going to see a failed dollar Cycle anymore, but a decline back towards the previous DCL is still likely.

 

10-25 dollar daily

A new dollar Investor Cycle high was produced by a plunging Euro. But overall, the dollar has been acting strongly anyway as this remains (in my opinion) just a very long consolidation off the 2014 rally. At some point, this consolidation will become the foundation and then the basis for yet another massive dollar rally. But that’s still some time away, very likely not before we see an end to this Investor Cycle.   I really do not see a downside case here for the dollar, not in the near future at least. I can see a QE4 event in the latter part of 2016, but it’s a higher dollar that will help to induce that event.

 

10-25 dollar wekly

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