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Thursday, December 09, 2004

The USD Trend Line (part 2)

First, the USD makes a 6 down days in a row end of downward trend signal. Then four days later it makes a 2-b end of trend signal. Then four days later, yesterday, it makes another one. This one probably sticks since the USD broke above its short term downtrend line that started at the beginning of October with big time gusto. So, what is it going to do next? Move up? It can but it doesn't have to. It can move roughly sideways, too. This is my bet since it produced a dead cat bounce after going below the 1995 low, and since it went above the 1995 low just for a short period yesterday. How long can it move sideways? I don't know but it has serious resistance just above where it is now. The 1995 low and the lowest neckline. This reaction/correction could last a week or two or three rather than months like it did the last time.

Gold came down real close to its major highly supportive uptrend line. Since I don't expect the dollar to go up from here much, that should be about it for gold to the downside. After all gold had gone up out of its shortest term channel. Something was bound to happen.

Same goes for silver. It came down real close to its major French curve/hyperbolic uptrend line.

In other words, we got a real good correction in gold and silver out of the way real fast. Basically finished business.

The other thing that's immediately bullish for gold and silver is that the shares acted real strong yesterday as the metals were taking big time dives. They acted exactly the opposite of how they have been acting these last few weeks. 2005 should see the opposite, volatility to the upside.

In other words, get crazy. Go against the crowd. Buy *today*.

"To be ignorant of what happened before you were born is to be ever a child."
-Cicero

Friday, December 03, 2004

A Little Change in the Wind

Last Friday, the dollar made 6 down days in a row. An end of downward trend signal. That one failed. Yesterday, Thursday a 2-b signal end of downward trend signal was generated. It is oversold, so we could have a pause to the downside in the USD.

Yesterday gold generated a 2-b end of upward trend signal. It is overbought.

Silver? No signals.

Thursday, bonds were down 6 days in a row which in this case is not a signal but bonds could go up here just a bit. Bond's downward sloping neckline just above these prices offer resistance to significant upward movement of bond prices.

The HUI is down 4 days in a row. Not a signal. It's already formed an upside down head and shoulders basing formation over the course of the last year or so. But still, I don't expect a break out into new high territory in the next few days considering what the dollar and gold are doing.

The Dow made it back up to the top of its 2-b formation. That 2-b might fail. It did intraday, but not on a closing bases. We'll see.

There could be a short term correction in current directions of the dollar and gold since general US equities could move up a bit from here. Or general US equities could move up from here because of the action in the USD and gold. I can't know where the real cause(s) and affect(s) are.

This all could be just a matter of days/weeks and should be of interest to only traders. Let me define my terms:
Trading: taking a position for days to weeks.
Speculating: taking a position for weeks to months.
Investing: taking a position for months to years.

"As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people." - H.L. Mencken (1880 - 1956)

Wednesday, December 01, 2004

"Yellow Bulls"

Bill Buckler of The Privateer is saying that the "Yellow Bulls" (black market money changers) in China are being swamped with USD that they can not get rid of. This has got to be going on in other parts of the world, too. Word travels fast on the Coconut Telegraph.

No wonder that after 6 down days in a row, 4 of them gap down days which have yet to be filled, the USD stops at just below the 1995 low and does nothing but a dead cat bounce as of 10:am Wednesday in the US. ino.com's dollar chart