Is The Us$ Destined To Collapse?

[badge]

!

That does seem to be the operative word in technical analysis.

Please exaplain

[badge]

[...]

DXY hit a high of 88.71, so 09 points off the first resistance area above and EURUSD found support at .1875, so a large way off the 1790/1825 cited.

DXY and EURUSD have since reversed 280 points and 475 points respectively.

At the moment there are various DXY buy signals showing around 85.8 and 85.2. Hardly set in stone though:unsure:!

Not set in stone indeed

Perhaps DXY support could show up around 82.75/85?

[badge]

I believe the CRB Index had a 'bearish cross'(black cross? dead cross?) in the last day or so if anyones interested in such things.

When a 50day moving average of the price crosses below a falling 200day moving average.

Perhaps if Lannarebirth has a free minute hes kind enough to post a 10yr+ daily graph of $CRB with 200 and 50 day moving averages to gauge if this phenomenon has been of any significance in the past?

In the recent past, these 'crosses' have often coincided with counter-trend reactions, implying perhaps a bit more of a bounce in the CRB Index before further declines??

Ive noted possible buying support around 245, 234 and 221.

The low on CRB Index was 247, so 2 points off the first cited area above, before reversing back up 20 points/8%.

Also as noted above, the 200day and 50day moving-average cross again coincided with a counter-trend reaction.

Next possible sell signal is at 272.5, then I imagine 278.5 and 285.

As an aside, liquidity waxing and waning means most asset classes have been sharing a high correlation in recent times. In April the CRB Index failed to rally as convincingly as EUROSTOX 50 shares, which could be seen as a lead, or divergence.

Again now we see the CRB Index breaking above its June recovery highs, whereas EUROSTOX 50 shares havent.

[badge]

[...]

Next possible sell signal is at 272.5, then I imagine 278.5 and 285.

As an aside, liquidity waxing and waning means most asset classes have been sharing a high correlation in recent times. In April the CRB Index failed to rally as convincingly as EUROSTOX 50 shares, which could be seen as a lead, or divergence.

Again now we see the CRB Index breaking above its June recovery highs, whereas EUROSTOX 50 shares havent.

EUROSTOXX followed CRB up. CRB eventually truned lower at 280.7, so not as close to my cited prices as usual. Must be a glitch somewhere.

DXY Index has been trending higher for a couple of weeks now, I guess the first hurdles or areas of profit taking will come at 83.75 and then 84.80.

Edited August 24, 2010 by badge

[LaoPo]

"Abrupt collapse" in the dollar coming

Hussman offers something of a primer on exchange rates, and concludes by saying this:

"The policy of quantitative easing is likely to force a large adjustment on the U.S. dollar because the Federal Reserve is choosing to lay a heavier hand on the Treasury bond market than would result from economic conditions alone," he says.

"The resulting shift in interest rates and long-term inflation prospects combine to dramatically reduce the attractiveness of the U.S. dollar. A significant and relatively abrupt devaluation is then required, in an amount sufficient to set up expectations of a U.S. dollar appreciation over time."

from:

http://theguruinvest...ing-for-dollar/

and

http://www.hussmanfu...c/wmc100823.htm

LaoPo

[cloudhopper]

Well that's an interesting thesis Hussman has there but after 2 decades of QE in Japan there has never been a sudden collapse of the yen.

If the USD were to collapse suddenly it would collapse the UST's held by UK, Japan and China et al, make exporting anything to the US impossible, immediately paralyze the 60% or so of world trade denominated in that currency on one or both sides and provoke more war mongering from the Western military industrial complex. So every government everywhere will do everything they can to avoid this. They may not necessarily succeed however.

[Naam]

Well that's an interesting thesis Hussman has there but after 2 decades of QE in Japan there has never been a sudden collapse of the yen.

but we saw huge fluctuations in exchange rates; not only JP¥ vs. major currencies but also major currencies vs. each other. anyway, my [not so] humble view, years of practical experience is that anybody who tries to forecast exchange rates is nothing but an arrogant pretender. history is proof for my claim.

[badge]

I agree Naamster.

When I started this thread, and then cited price areas the USD Index would find buyers, and buyers emerged there, and its subsequent 20% gain, to price areas where cited sellers would be found, and its subsequent correction as sellers emerged there, I just got lucky.

Naturally there were anxious times inbetween, times where I feared I may have held too long, but thats speculating.

Incidentally if anyone knows of a service or software than can be any more accurate Id gladly pay, as it consumes far too much of my time.

2009-09-23[/b] 20:30:07']DXY has support at 75.6, 74.5 and 74

Looking at recent price data the next possible res... i have... for DXY... lies around 88.8, 89 and 89.2...

I dare say a decent counter-trend move may not be far off?

Although I appreciate Im in the minority.

Nobody with a basic understanding of macroeconomics can be bullish on the USD long term, its not possible. Its mathematically impossible.

[Naam]

Incidentally if anyone knows of a service or software than can be any more accurate Id gladly pay, as it consumes far too much of my time.

you seem to know your business Badger in my [not so] humble opinion you should rely on your experience, your gray cells and your belly instead of some software.

[badge]

Perhaps DXY may find some buyers for a while, around 80.85 or 80.25?

[badge]

Perhaps DXY may find some buyers for a while, around 80.85 or 80.25?

Well DXY 80.85 attracted some buying interest, but evetually gave way to lower prices.

78.25 should provide a buy signal and some profit taking for DXY shorters, and a few % lower therafter I imagine. These areas may correspond to .3485ish and .3735ish on spot EURUSD.

[lannarebirth]

Perhaps DXY may find some buyers for a while, around 80.85 or 80.25?

You're probably close to right, but it's not a very promising chart. Some positive divergances:

[Naam]

Anglo Irish default rumours put pressure on €UR and €uroland markets.

[Chunky1]

I don't see an abrupt collapse happening because it wouldn't be in the international interest and I don't think it would happen without being the result of actions taken by foreign nations, like when France demanded gold for their dollar reserves in the 70's or when the IMF forced/conned Thailand into floating the baht.

[badge]

DXY has been in a tight range last few weeks, which is curious as my model is showing a buy signal at 75.15 and 74.95, .75 thereafter I imagine.

[Naam]

Badge, i wonder whether it is wise to rely on a "model" (which is based on pasthistory and experience) in times when a bunch of unforeseen circumstances might loom around the corner.

[lannarebirth]

DXY has been in a tight range last few weeks, which is curious as my model is showing a buy signal at 75.15 and 74.95, .75 thereafter I imagine.

The dollar will find it difficult to rise through a 50sma with a steeply descending slope. If it can stay more or less near its LT uptrend line these next 3 weeks it will be de-sloped and it can rise.

[cloudhopper]

DXY has been in a tight range last few weeks, which is curious as my model is showing a buy signal at 75.15 and 74.95, .75 thereafter I imagine.

My model shows that the dollar has ambitions to rise sharply if it doesn't trip over it's crank into the abyss, unless it just can't break out at all. Decisions by the Fed on Nov 3 and reactions to it by all the other CBs don't affect my model.

[badge]

Badge, i wonder whether it is wise to rely on a "model" (which is based on pasthistory and experience) in times when a bunch of unforeseen circumstances might loom around the corner.

My good man the proof is in the eating of the pudding Unforeseen circumstances are precisely why I rely on a model(solely reliant on trade capture/price) instead of what you or I may perceive to be looming around the corner.

The model signalled respective buys/sells at last years low and this years high in DXY, to within 0.5%, which led to 16% and 15%(thus far) runs, post-reversal, as eveidenced on this website.... Along with consistently signalling the significant(5%+) turns in cash crosses, stock index futures and stock sector indices, Gold most recently etc, usually within <0.5%.

Ones own trading and experience can make a little difference to results depending on risk managment, amongst othe rbasics.

It might not be much, but it works for me.

[Naam]

Badge, i wonder whether it is wise to rely on a "model" (which is based on pasthistory and experience) in times when a bunch of unforeseen circumstances might loom around the corner.

My good man...

It might not be much, but it works for me.

then... my good man... please enlighten me why you opened this thread with a question

[cloudhopper]

The model signalled respective buys/sells at last years low and this years high in (snip), Gold most recently etc, usually within <0.5%.

Hey that's pretty good Badge we need you over on the gold thread. Check it out there's a guy who predicted a big upturn at 5am today and only missed it by an hour!

[badge]

Badge, i wonder whether it is wise to rely on a "model" (which is based on pasthistory and experience) in times when a bunch of unforeseen circumstances might loom around the corner.

My good man...

It might not be much, but it works for me.

then... my good man... please enlighten me why you opened this thread with a question

For fun. As a crude sentiment survey.

The opinions of 'professionals' are of no interest to my portfolio, let alone posters on websites.

They do however provide a crude but interesting view into the crowds perception.

[badge]

The model signalled respective buys/sells at last years low and this years high in (snip), Gold most recently etc, usually within <0.5%.

Hey that's pretty good Badge we need you over on the gold thread. Check it out there's a guy who predicted a big upturn at 5am today and only missed it by an hour!

Is 1.5% "big"? Im not as easily pleased

If the low is not breached and Gold advances 5%+ it will have been a decent trade/call, in my book.

[badge]

I note neither of you offer any forward looking views for DXY, so are of no interest to the crude nature of the thread.

[lannarebirth]

I note neither of you offer any forward looking views for DXY, so are of no interest to the crude nature of the thread.

Nice action by DXY at 50 dma. A week or so of consolidation or shallow retracement would flatten it and provide the foundation for a further advance.

[badge]

Nice action by DXY at 50 dma. A week or so of consolidation or shallow retracement would flatten it and provide the foundation for a further advance.

Indeed LB.

Nothing more to add for me yet.

DXY has been in a tight range last few weeks, which is curious as my model is showing a buy signal at 75.15 and 74.95, .75 thereafter I imagine.

DXY s recent low came in at 75.63, so my systems Buy was a whopping .48c/0.64% out, very unsatisfactory for me, and as a result the only trade I got off was v EUR.

I was sure I left the models CRB Index Sells too, which were 323 and shaping up for 343 and 353 thereafter, but I clearly didnt leave them on this site. CRBs recent high was 320.28, so likewise out by a large $2.7/0.9%, however I dont trade any CRB components an even running it through the model has been a recent curiosity more than anything else.

CRB

[badge]

[...]DXY s recent low came in at 75.63, so my systems Buy was a whopping .48c/0.64% out, very unsatisfactory for me, and as a result the only trade I got off was v EUR.

I was sure I left the models CRB Index Sells too, which were 323 and shaping up for 343 and 353 thereafter, but I clearly didnt leave them on this site. CRBs recent high was 320.28, so likewise out by a large $2.7/0.9%, however I dont trade any CRB components an even running it through the model has been a recent curiosity more than anything else.

CRB

Just had a Sell signal on DXY at 80.35, and current spot prices are oscillating around the same price so have covered half EURUSD for a neat 10c on the button.

Id like to think further DXY gains await as the next sell signal looks likely to come in around DXY81.80, small corrections notwithstanding.

[cloudhopper]

[...]DXY s recent low came in at 75.63, so my systems Buy was a whopping .48c/0.64% out, very unsatisfactory for me, and as a result the only trade I got off was v EUR.

I was sure I left the models CRB Index Sells too, which were 323 and shaping up for 343 and 353 thereafter, but I clearly didnt leave them on this site. CRBs recent high was 320.28, so likewise out by a large $2.7/0.9%, however I dont trade any CRB components an even running it through the model has been a recent curiosity more than anything else.

CRB

Just had a Sell signal on DXY at 80.35, and current spot prices are oscillating around the same price so have covered half EURUSD for a neat 10c on the button.

Id like to think further DXY gains await as the next sell signal looks likely to come in around DXY81.80, small corrections notwithstanding.

Sorry to interrupt but I'da thought a plunging gold price would be bullish for the $. But then again I don't even understand how you can sell at 80.35 and then sell again at 81.80 - don't you need to buy somewhere in between?

[badge]

Just had a Sell signal on DXY at 80.35, and current spot prices are oscillating around the same price so have covered half EURUSD for a neat 10c on the button.

Id like to think further DXY gains await as the next sell signal looks likely to come in around DXY81.80, small corrections notwithstanding.

DXY pushed up to 80.65 today before a small correction, as a result my system is already showing a sell signal at 81.75/85, as expected.

This may correspond on eurusd to around .2985/55/35. Cable had a buy earlier at .5555, but it has already bounced 90pips from 5559. Next Buy signal(assuming 5555 gets broken) lies at 5350, with 5095 looking likely thereafter.

[badge]

Sorry to interrupt but I'da thought a plunging gold price would be bullish for the $.[...]

As far as trading currencies goes I personally have no interest in the price of Gold, let alone use it to divine trades in other markets.

[...]But then again I don't even understand how you can sell at 80.35 and then sell again at 81.80 - don't you need to buy somewhere in between?

Not necessarily; you can sell as many times as your broker/account will allow, whether you have bought beforehand or not.