Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

US Dollar mid-term top makes Precious Metal and Energy Stocks a Buy

Stock-Markets / Financial Markets 2014 Nov 09, 2014 - 10:44 AM GMT

By: David_Petch

Stock-Markets

I decided to do an important update of the US Dollar Index, because Friday’s rise in Gold and gold stocks alongside oil indicated a likely top. I have been extremely bearish on energy and precious metal stocks the past few months because of the upside strength potential in the US Dollar. I still am bullish on the US Dollar, but as this analysis will indicate, a top has been put in place that should see a correction minimally last until early to mid-March 2015.


Think of Degrees of an Elliott Wave count as seconds are to minutes are to hours. Each fits into the other, with each minutes a Degree higher than seconds and an hour a Degree higher than minutes. The Elliott Wave structural analysis illustrates that in this update. The short-term Elliott Wave count of the US Dollar Index is shown below, with the thought pattern forming denoted in green. Fibonacci retracements are shown for various waves of the impulse pattern (5-3-5-3-5) that just formed:

  1. Wave [v] is exactly 161.8% of wave [i]
  2. Wave [iii] is exactly 200% of wave [v]
  3. The 50% Fib retracement level of wave A is 84.13.

Wave A was impulsive with five lower Degree segments that had alternation between waves [ii] and [iv] and an extension in time, price and complexity for wave [iii]. The fact there was no 61.8% retracements found in waves [ii] or [iv] alongside waves [v] extension relative to wave [i] strongly suggests a very strong move to the upside once wave B completes. Wave B should be around the same length as wave A, or will be 50% of that in time. I am assuming wave B will be equivalent in time and that wave C to form will be equivalent to A+B. This would put a top of the US Dollar Index around November-December 2015 anywhere between 93 and 95 as mentioned previously. With an impulse forming for wave A, I suspect a zigzag pattern (5-3-5) is forming, which means wave C should be impulsive. With a pattern as strong as wave A, the depth of the correction is only likely to carry down to the 38.2-50% retracement level at the most. So, with time in wave B expected to match wave A that puts the pattern terminating sometime between early to mid-March 2015.  Based upon this, precious metal stocks and energy stocks should shine over the coming 3-4 months. Remember though, that this time period should be viewed as a being a trade. Once wave B is complete, wave C is likely to be 161.8% of wave A, or 12 cents. If a bottom occurs at 84.0, then a top could reach as high as 96 cents by November-December 2015. Based upon the Contracting Fibonacci Spiral Chiral Inversion that happened in May 2013 to the S&P 500 Index, a top is due no later than August 2015 in order to comply with the Fib Spiral bottom due in 2016. I have to go back over my numbers, but June 7th, 2016 comes to mind of the bottom. With the Chiral Inversion of the pattern, this was extended by 4 months, so 61.8% of 4 months is approximately 2.5 months. This would put a bottom due in the S&P 500 Index around mid to late August 2016. So, in a nutshell, the US Dollar rises too fast and puts a top in the broad stock market indices sometime in August 2015, followed by the US Dollar Index topping out towards the end of 2015.

The long-term Elliott Wave count of the US Dollar Index is shown below, with the longer-term picture seen clearly. A move above 81.70 back in July 2014 invalidated the double Head and Shoulders pattern that had a measured move down to 73.0. This energy was flipped to the upside, with a projected target  of 87.0 for wave A…we overshot by 1 cent, which indicates the entire move higher over the next 12-13 months in the Dollar is going to be very strong. I wanted to post this update because I have been really bearish towards energy and gold stocks the past two months…with the sharp reversal in gold and oil yesterday and the Fibonacci levels hitting textbook levels it appears the US Dollar has put in a top for the next 4 months, or early to mid-March 2015. So, I would now suggest it is safe to go long precious metal and energy stocks, knowing that this trade has a very limited window of opportunity.

That is all for this update. Have a great day.

By David Petch

http://www.treasurechests.info

I generally try to write at least one editorial per week, although typically not as long as this one. At www.treasurechests.info , once per week (with updates if required), I track the Amex Gold BUGS Index, AMEX Oil Index, US Dollar Index, 10 Year US Treasury Index and the S&P 500 Index using various forms of technical analysis, including Elliott Wave. Captain Hook the site proprietor writes 2-3 articles per week on the “big picture” by tying in recent market action with numerous index ratios, money supply, COT positions etc. We also cover some 60 plus stocks in the precious metals, energy and base metals categories (with a focus on stocks around our provinces).

With the above being just one example of how we go about identifying value for investors, if this is the kind of analysis you are looking for we invite you to visit our site and discover more about how our service can further aid in achieving your financial goals. In this regard, whether it's top down macro-analysis designed to assist in opinion shaping and investment policy, or analysis on specific opportunities in the precious metals and energy sectors believed to possess exceptional value, like mindedly at Treasure Chests we in turn strive to provide the best value possible. So again, pay us a visit and discover why a small investment on your part could pay you handsome rewards in the not too distant future.

And of course if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these items.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2014 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

David Petch Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules