As generally bearish as I am…I’m really not what you’d call a “doom’s day’er” although these days…..it really does feel like that’s what this is setting up for.
Everyone on the planet is 100% convinced that The Central Banks have this all under control, and that there is no possible way things can wrong.
That’s scary in itself as….haven’t markets always traded “up down, up down”, bull bear, bear bull, back forth on and on – same ol thing since the beginning of time?
It’s when the boat gets a little too loaded to one side when markets are generally known to “do what they always do” no?
If the Euro and Pound have not bottomed against the US Dollar here – I’ll eat my hat.
EUR/USD has been basing and putting in a continued series of higher lows on a 1H chart since Nov 6th!
GBP/USD MUST have now double bottomed at 156.00 on the dot.
What is absolutely amazing here day-to-day, is that we “still” see the Dollar Index ($DXY) appear to be higher, but really have it in range for the past 10 straight days. This price action is grueling, with the story of all stories still being that of the seemingly “ever depreciating Yen”.
It’s actually “showing up/making a difference” within the DXY basket of currencies (considering how small a percentage it carries), and considering that EUR is continually moving higher.
Now that is what you call some “serious weakness”, as well some serious divergence. You have to be watching both EUR as well GBP for bottoms vs USD here, and along with it a host of other market dynamics on the cusp of change.
Gold as well Silver both look to be “front running” potential weakness to come in USD – and as I suggested earlier, the move is going to be large and take the majority of passive traders completely off guard.
It’s impossible to put a target on USD/JPY at this point considering that it’s in “no mans land” but as far as any kind of “count” might go ……we are well into the final stage of 5 of 5.
If all of this coincided with a sudden crash, or news of the world ending I would not be surprised at all, in fact……at this point it’s looking just as likely that things are setting up for “exactly that”.
I’ll be “stacking cans” in my bomb shelter for the rest of the day.
That’s a joke.