Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Dollar Breaks Below 90 – Continue To Confirm Depreciation Cycle Phase

Currencies / US Dollar May 24, 2021 - 05:59 PM GMT

By: Chris_Vermeulen

Currencies

If you’ve been following my recent research posts, you already know my research team and I are expecting some very big volatility and trends in the US and global markets over the next 12 to 48 months. 

The US Dollar Index fell below a critical support level above 90 recently.  This move lower after attempting to bottom in early 2021 suggests our broad Appreciation/Depreciation cycle phase research is continuing to play out.  This means we should start to prepare for bigger trends, more volatility, and the potential for broad market price rotation over the next few years. You can read about our Appreciation/Depreciation cycle phase research entitled Long Term Gold/US Dollar Cycles Show Big Trends For Metals and Metals Rally Early In 2021.


You Can’t Fight The Market Tides – Get Ready For The Depreciation Cycle Phase

These broader market cycle phases act like lunar phases in ocean tides.  There are always smaller waves that lap at the shore continually, but there are bigger trends, the lunar cycle trends, that drive larger excess tidal highs and lows.  The global markets work in much the same manner with the longer-term Appreciation/Depreciation cycle phases (which usually last about 7 to 9 years in length).  When we are in an Appreciation phase, precious metals fall out of favor as global traders and investors pile into strong global equity market trends.  When we are in a Depreciation phase, precious metals tend to trend higher because global market volatility, a declining US Dollar, credit market and other concerns drive traders into more protective/hedging positions.

In short, the transition from a general market Appreciation cycle phase, which we believe ended in late 2019, into a new general market Depreciation cycle phase suggests the following general trends will take place over the next 5 to 7+ years and likely prompt the following types of price trends:

  • Precious Metals should continue to rally as broad market economic and credit market concerns become elevated.
  • Larger price volatility and bigger price rotations will likely drive traders to become more cautious of the “buy and hold” type of passive investing.  These bigger price swings and how they related to sector trends will create a true “traders marketplace”.
  • Commodities usually rally to a peak near the end of an Appreciation cycle phase. You can learn more about these Commodities Super Cycles here.
  • Generally, global equities markets attempt to reprice true value within a Depreciation cycle phase.  This happens because the end of the Appreciation cycle phase usually prompts a “euphoric rally” type of extreme peak.  After that peak exhausts, the transition into the Depreciation cycle phase usually consists of a “revaluing price phase” which is followed by an ultimate bottom, then the start of a reflation phase.

Our technical levels on the US Dollar are 89.99 (which has already been breached) and 88.43.  Once the 88.43 level is breached,the next major standout lows are near 84.47 and 79.74.  These deeper support levels represent a further decline of -6% to -11% for the US Dollar. My belief is that the markets are transitioning into a new Depreciation cycle phase suggests that any move below the 88.43 level will likely confirm the cycle transition is persisting and that we can continue to expect bigger volatility and bigger trends in metals and within the global markets.

Start Preparing Now For The US Dollar To Breach The 88.43 Level

If our research is correct, the next 5+ years are going to become a “traders marketplace” – where the large rambling bullish price trends are less frequent and where active traders want to start executing strategic trades when the markets confirm real opportunity exists for profits – very similar to what happened between 2002 and 2011. 

Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!

This following example of the Gold Cycle Phase, as seen on the chart below, highlights the Appreciation/Depreciation cycle phases and shows key Fibonacci Extension price targets near $2100, $2600, and $3200 for Gold.  Gold may rally much higher than the $3200 level if the current Depreciation cycle phase is aggressive in nature.  Only time will tell what really happens because of this new cycle phase.

If my research is correct, the next 7+ years will test the skills of even the best traders.  You’ll need to really be on top of your strategies and fully understand the volatility and risks that are present because of this new Depreciation cycle phase. This is the type of market where huge opportunities exist if you can stay well protected from the risks and volatility while capturing the big trends.  Are you ready for these exciting market trends?  Want to know how we can help?

You can learn more about how I identify and trade the markets by watching my FREE step-by-step guide to finding and trading the best sectors. Of course, my BAN Trader Pro newsletter service does all the work for you, with my daily pre-market reports, proprietary research, and BAN trade alerts. 

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

© 2005-2022 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