US $ Smoked. Game over? Is the yen telling?

The US dollar is getting whacked today against the euro, yen, and pound...but in this risk-off day where stocks are getting clobbered, the dollar is holing up against the commodity currencies...but looking at the US dollar index chart weekly basis suggest if it doesn't hold 9923 support, there could be a long way to fall even if only a correction...There are decent rationales to suggest the dollar bull market is over--disappointment on the Trump agenda, global central banks playing catch-up on rates, etc.; or an expected correction until real money flow pours into the US on Trump agenda implementation and tax holiday for pools of cash held by US companies offshore...we shall see...

...but over the intermediate-term, measured in months, maybe the $-Japanese yen relationship will show the way.  A break of critical support at 111.57 in USD/JPY, tested today, suggest the yen goes lower and maybe a lot lower...alternative targets to 108.43; then 104.05 on this view...stay tuned...

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Comment

Short EUR/USD with caution...

19 March 2017/11:25 a.m. ET

EUR/USD Daily [last 1.0736]: The minor wave [ii] rally into the high on Friday at 1.0782 may be complete—representing a very deep retracement of wave [i] down. We are stretching into make or break time for the US dollar. A rally above 1.0909 changes the view to bullish here and bearish for the US dollar. The minor c wave extension into the high was right on an equality target as seen more clearly in the 4-hour chart on the next page. At its current position, the pair appears to be a very good risk/reward short setup.

EUR/USD 4-Hourly: Counting the rally into Wave 2 as a three wave [a]-[b]-[c]. Note minor wave [c] breaking into three symmetrical waves with minor a being equal to minor c at 1.0784—the rally high so far. Momentum is turning down [as you can see in the top pane of the chart]. Stay tuned. We like the short side here…

Black Swan Forex subscribers shorted EUR/USD today a 1.0749...

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Holding GBP/USD long and subs happy so far...

We bought GBP/USD Tuesday morning, one day before the Fed meeting based on our Elliott Wave analysis.  Below is the link to comments to subscribers Tuesday evening and a 240-min chart view Tuesday evening...so far so good:  GBP/USD 4-hour View  and analysis PDF  

If you like this kind of analysis, instead of blah...blah...blah...we would like to have you as a subscriber to our service.  You can sample our service simply by signing up at our homepage.  Thank you.  

Jack Crooks, Black Swan Capital

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US Dollar: Failed at resistance; needs to hold support...

Monday 13 March 2017/8:35 a.m. ET

US $ Index 4-hour View [last 101.26]:  Nope.  The dollar index could not get through the 102.26 area defined as key resistance.  Now breaking lower in what could be a multi-day move lower.  We are now labeling the rally as a zig-zag corrective pattern in place, now in minor [c] of 2 lower…watching for support in the 100.50-20 area…below there and concern for a much deeper move lower builds…

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Relative Performance: Commodities & the Dollar

Please click here to view the pdf version

Quotable

“Only those who will risk going too far can possibly find out how far one can go.”

T. S. Eliot

Commentary & Analysis

Relative Performance:  Commodities & the Dollar

If, the fifth and final wave rally of the US dollar bull market, which began back in 2008, is underway [and for the record we have been showing this setup for a long time; and granted, we need a move back above the old high at 103.82 to add more confidence]…

…then, based on this longer term regression of the trend (chart next page), it doesn’t look good for commodities relative performance…

And this underperformance in commodities has been quite clear when compared to stocks (but then again almost everything has underperformed that rocket ship to be fair)…

Putting the dollar bull market into perspective (chart next page), even a rally in the dollar index to 111 (as shared in the chart on page 1) falls well short of the prior peak near 120 (E-Greed Era), and far below the 164 bull market high near during the Reagan administration [Volker Kills Inflation Era].  

So, I guess I am saying a dollar index rally to 111 isn’t an extraordinary expectation.  It would still maintain the pattern of lower highs and lower lows for the index in this period of extraordinary credit expansion.

I realize there are a lot of people still making the case for gold.  Oil’s case is a bit more precarious given supply numbers and ability for supply to ramp up so quickly.  The rationale for wanting something real in a world in which is seems paper and risks are everywhere is natural.  But the correlation continues to suggest if the dollar goes higher then gold and oil probably head lower…

So, as they say: Step right up and place your bets!  The wheel is spinning…

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We have been lucky enough to be positioned for this latest rally in the US dollar; below is our current positioning in our Forex Service:

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Thank you.

Jack Crooks

President, Black Swan Capital

jcrooks@blackswantrading.com

www.blackswantrading.com

772-349-6883/ Twitter: bswancap

 

 

Comment

Time to get long USD/JPY? Scope to 120.00...?

We have a target with scope all the way to 120.00-level in a Wave (5) rally...

...and today, the pair found support bang on a key extension target of 111.71--equality in the vernacular, whereby Wave [c] is equal to Wave [a].  The low today was 111.67...now bouncing from here...our subscribers are now long...risk to 111.57 the daily swing low changes this view  to bearish...

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New Zealand Dollar Wave Analysis

We shared the following Elliott Wave analysis with our subscribers yesterday morning...we are looking for a sharp push lower...the Reserve Bank of New Zealand said it is hoping for the same in its monetary policy statement today, leaving rates unchanged.  

Primary Count [Daily & 240-min View]

NZD/USD Daily [Last 0.7296]

Date/Time: 7-Feb-17/7:45 a.m. ET

Looking for a trend move lower in Wave (a) of E of (A) of larger 5th Wave down…a mouthful indeed.  Daily oscillators are turning down after what looks as a spike high (0.7374) and test of the high of Wave B (0.7402).  As with Aussie, the New Zealand dollar likes to put in double-tops.  First daily swing support comes in at 0.7237.

NZD/USD 240-min: Agreed.  It is a bit of a choppy and convoluted pattern; but seems to fit to describe the (A)-(B)-(C) rally from the 0.6859 to 0.7374 to make up larger Wave [D].  Next key swing support is 0.7296…looking for a push lower, then possibly another test of the 0.7374 high in minor Wave [ii].  If this expectations plays out, and the pack is acting “right,” it could give us an opportunity to add to the short side.

Black Swan Capital 

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