DOLLAR LOOKS LIKE THE INVERSE OF GOLD
While I was perusing the charts tonight I came across the Dollar Index and thought it was eerily similar in an inverse fashion to what Gold looked like recently. In this instance we have a triple top where Gold had a triple bottom. What this could mean is that if we get clear which normally happens on a 4th test, we could take off. There is however, one major problem that I see with that scenario.
We have a significant Commercial short position and high open interest, right at the triple top. We are also following the seasonal very closely so in those instances it matters. We have conflicting information here. The other development that is interesting is the way the Dollar has re-attached itself to the stock market. I say that because that is the way it used to always move. It was only in recent years that it developed this inverse relationship with the Dollar Index.
In situations like this I think it is best not to guess. It is also symbolic of this conflicting scenario that the price action on the daily chart is so choppy. I don't think there is any point in trying to push something in this instance so I am looking elsewhere. Even though this is similar to the Gold market flipped upside down, I don't think the level is as well tested as the support level in Gold was. As a result I don't expect to see the same type of break of it. I think if I had to pick I would prefer to see a sell setup on the daily chart as opposed to a buy.
I was thinking as one report after another came out today magically once again beating the estimates by 3 to 5 cents, what an incredible coincidence that is always is. I want to make sure I understand all this correctly. We went through a tough period where one of the outcomes is that the CEO and CPA firms had to sign off and take responsibility for the reports. We added all these regulations to make sure no funny business was going on. Now we get into earnings season during what should be the most transparent time in history and magically after the "full disclosure" conference calls where the result should be that the estimates closely match the earnings reports that so closely follow, yet all these wonderful magical surprises happen. As my cousin Vinny would say, let me ax you dis? How exactly are all of these wonderful magical events taking place at all these companies from different industries, where they all unexpectedly beat the earnings estimates while at the same time being honest throughout the process of discussing how their business is doing?
This is beyond a racket folks, BEYOND! There is not one single thing that has changed. Keep in mind Price Waterhouse did the books for PFG in the past, during the time the fraud was being committed, yet they are not investigated at all and are even hired by the bankruptcy court in the PFG case at outrageous hourly rates, to investigate whom exactly? Themselves? This insider game is never going to change ever.
The ES bounce today puts us up into an area where we are close to lifting off again. If the decline is going to happen it seems to me we need to hold in this area, then turn down