Monday, January 9, 2012

Very exciting Juncture in the U.S. Dollar

I have maintained a solidly bullish long-term stance on the U.S. Dollar on this blog since its inception (first post on U.S. Dollar in November 2009). However, I thought there was a chance the U.S. Dollar index could take out its 70.70 March 2008 low before starting its massive Bull Market. Very Recently, Objective Elliott Wave (OEW) developed by Tony Caldaro has confirmed a long-term uptrend in the U.S. Dollar. This suggests the Dollar bottomed in 2008 and has been basing since. This is the original stance I took, however I started to entertain the idea that the U.S. Dollar needed another all-time low first. However, with the OEW long-term uptrend confirmation in the USD and long-term downtrend confirmation in the EUR/USD currency pair, the odds now shift to that the Dollar bottomed in 2008. Tony expects the U.S. Dollar index to reach 140 by 2018.....I expect much higher than that...possibly to 300 or higher. However, it will likely continue to base until the Gold market tops out in 2013-2014. In my view, this is all a topping process. With the bearish expanding wedge pattern developing in the DOW going back to the late 1990's, the foreign currencies topping out in 2012, the USD cycles bottoming in 2012, and commodities due to top out completely by 2014. It seems as if Deflation is about to come back with a vengeance. The safest place to be is cash as I have reiterated many times before...and with all these cyclical events happening.....people need to act now to get liquid and stay that way until the deflationary storm is over.

Just as an FYI: this chart IS drawn to scale....yes I expect the DXY to hit 300 before the end of the decade.

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