LETS CHECK IN ON OUR FRIENDS OVERSEAS
I stumbled across my good friend Joe Battaghlia on the radio again yesterday afer not having heard him for several months. I have to give it to this kid he is consistent. He would tell you if the Lakers did not beat the spread against the Timberwolves, that would be a reason why the dollar would decline and Gold would rise. Of course he works for a company that sells coins, so of course he is a GOLD bull and dollar bear. Once again he was touting the pending dollar collapse which ironically you do not hear as much talk of lately.
Of course people like me did give you a heads up of a dollar rally in advance where he makes no commissions in those types of events, so it would be unlikely a decline in GOLD and rally of the dollar, would be called by a coin salesman.
Above is the chart of the EURO and we have some conflicting signals. First we have in the bottom pane a very dominant downtrend that is evident. This Flat Lining situation that Larry Williams teaches is something not to be ignored, and was the main reason when playing a couple of longs a few weeks back when we made that little bounce, that I pulled the ejection handle quickly taking small profits. In situations like this you just sell every rally until it subsides. Now at this point we also have the momentum oscillators both in downtrends indicated by the red arrows. This supports that the longer measure Flat Lining sell situation. There are a couple of things leaning the other way. First, the purple line. This is Larry Williams POIV and it is diverging positively. When this diverges I have learned to pay attention, it is does not diverge nearly as much as most accumulation/distribution indicators, when it does moves normally occur.
We do also have huge Commercial buying going on here, but as I have mentioned recently, the COT stuff does not mean much anymore except in special circumstances. The patterns in that data are so erratic now that I really do not think they are worth anything at all. Sometimes they are heavy sellers in downtrends, sometimes heavy buyers. In one case their buying confirms a trend and in another it confirms it by them being inversely positioned. Their is just no consistency at all with this stuff anymore, and I have had my fill of brain damage and equity damage by relying heavily on it.
You can see on the following weekly chart, that the Commercials were consistent sellers during last years big uptrend and consistent buyers during the current downtrend. Wrongway feldman is the best way to describe that track record. The one thing I have highlighted which might be significant, is the heavy short position currently in place with the Small Specs in green. If you look at the last time this happened a major low was formed. This bears close watching but for now the trend is down, the momentum oscillators are down, and the longer term momentum is down. As a result, I do not expect a rally here anytime soon. We do have mixed signals here, so I do not see a trade either way for me in the next week here.