QuantitativeExhaustion

SepTaper Worries, US Debt Ceiling, New Federal Reserve Chief

INDEX:DXY   U.S. Dollar Index
1371 76 30
Here I am putting together the start of a road map of significant events to take place over the next 6 months, and how the US dollar             might react to these events.

Our next Federal Reserve meeting has many implications. Traders/Investors are hearing about the possible September taper, or a more hawkish tone from the Federal Reserve . I am one of those that believe the Federal Reserve will not be hawkish at all, and most likely be more dovish.

Why?
For one Bernanke is leaving. Ben does not want to change course of direction. Bernanke has been the QE             guy and will be remembered as the QE             guy. Ben will leave the Federal Reserve in February 2014 without any changes in the Feds modus operandi.
Two... The US Debt Ceiling is going to be debated as we approach the 17 Trillion debt limit. The Federal Reserve will not add fuel to the fire by mentioning tapering going into a dangerous political event. If anything Bernanke will sound very dovish and keep the market tilted higher.

Now for the US debt ceiling. Congress, most notably the house of representatives are planning nuclear fiscal action if each other sides can't agree on budgets and debt limits. Republicans are ready to shut down the government and talk tough. These harsh words could cause the market to waiver and fall, probably not as much as 2011, our previous debt limit debate. I do expect the US Dollar             DXY             to have greater implications this time around. The timing of the Federal Reserve dovish remarks will probably push the dollar to the lower smaller channel inside the wider multi-year ascending channel. As we near the debt limit 17 Trillion I expect the US Dollar             to move quickly to the upper resistance and most likely outside the smaller channel. This overshoot of the resistance, and if it hangs above the line for a week or two, will cause the market to revert back to the bottom multi-year channel. If Janet Yellen takes over the Federal Resever, we will probably see much more inflation in 2014. This will cause the Dollar to sink fast and Gold             , oil             , copper             , food to rise quickly.

So this is my roadmap going into the next 15 months. Will evolve investment strategy and update charts if events were to change.


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** >>> I'm rethinking the inflation comment** Starting to see a long 14 year bearish cycle on commodities . Period of low U.S. bond rates and low inflation. Wouldn't be surprised to see us kickback a little if we run to 85+ and resume a bullish move to 90 DXY             level.
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Here is a look at Fibonacci Clusters with two previous similar trend lines.
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
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option Game plan
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
This option play includes using UUP as the underlying to take risk with the US Dollar Index

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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
81.38 seems to be the resistant point at which we will have to watch >> if DXY US Dollar turnsover next week (at or near 79.80 or lower).
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ct586283
3 years ago
I always thought a chart system with major news or financial news events would be interesting. Its just hard to accumulate all of the various events and weigh their future implications. Are there chart systems that do this in a more automated way? Like showing earnings events on a chart but instead, show Federal Reserve meeting, or Sharknado hits Wall Street. Anyway I like your analysis and well thought out events, thanks for the hard work.
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QuantitativeExhaustion PRO ct586283
3 years ago
There has not been a successful system that takes into account significant financial and political events and human behavior. You have to understand implications of what will happen and give your best speculation as to which way the chips will fall.
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Robert Hightower
3 years ago
I hear US House will vote Sept. 30th on Debt Ceiling.
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QuantitativeExhaustion PRO Robert Hightower
3 years ago
I think it's safe to say they'll patch it up with yet another short term fix with near dated deadline to push the drama into the 2014 election.
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Not much has changed
added a new plan of attack with options
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clifkix5 QuantitativeExhaustion
3 years ago
I still like this play alot. I think this can work extremely well. It will just be interesting to see exactly how far the DXY tumbles with these events becuase its hard to quantify.
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clifkix5 clifkix5
3 years ago
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I plotted some important dates on the UUP chart to give us an idea of how these events affect UUP Price. Its important to notice 2011 where the debt limit battle caused UUP to fall massively. There was a quick pop however after each Debt Limit Increase was signed
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QuantitativeExhaustion PRO clifkix5
3 years ago
I'm not so sure the debt limit will have that much of an impact. Looks like automatic spending cuts on Oct. 1 and Federal Reserve taper will impact the dollar going forward.
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QuantitativeExhaustion PRO clifkix5
3 years ago
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QuantitativeExhaustion PRO clifkix5
3 years ago
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Smaller fractal, not all that reliable
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QuantitativeExhaustion PRO clifkix5
3 years ago
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Inverted 30 YR Yields vs. DXY US Dollar
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
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Trucking QuantitativeExhaustion
2 years ago
Dollar went cold
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Let's see who replace Ben Bankster...Larry Summers....? http://www.marketwatch.com/story/treasury-yields-mark-new-two-year-highs-2013-08-19?mod=wsj_share_tweet
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QuantitativeExhaustion PRO WallStScalper
3 years ago
Janet Yellen is more likely. Larry Summers is a great candidate for jeopardy not Chairman of the Federal Reserve. He's full of facts, however not a great decision maker or leader.
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alex.a QuantitativeExhaustion
3 years ago
How do you know so correctly? It is jaw-opening - You read my exact mind about him.
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Historical Volatility is falling fast. Lower HV is a good indicator of cheaper options and a bias towards bullishness, which is contrary to my views.
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Need to see divergence. CCI 50 on daily chart is one I'll be watching
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Good read.. By Matthew Lynn

Get ready for the Merkel liftoff for markets
Commentary: Once chancellor is re-elected, ECB can print money

SEPT 23 <<

http://www.marketwatch.com/story/get-ready-for-the-merkel-liftoff-for-markets-2013-07-10
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clifkix5
3 years ago
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I think we are still in play as per this chart. Our entry into UUP could definitely be preserved. If this falls at this pivotal fib line, which it's holding so far, then we don't really see much support until the 79.00 even range which will put our UUP at 21.5. That could be amazing entry into 23 UUP jan calls at .06-.08 each
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
That was a nasty throwback, which was counter trend from the bearish previous move.
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2 Day Big Picture
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Negative Momentum carrying us to our ascending bottom channel.
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StealthTrader QuantitativeExhaustion
3 years ago
Clone....
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QuantitativeExhaustion PRO StealthTrader
3 years ago
That worked. This is a very nice channel.
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QuantitativeExhaustion PRO StealthTrader
3 years ago
Stepped out of the channel. Is this simply a short term slip before proceding back in the channel and moving much higher?
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QuantitativeExhaustion PRO StealthTrader
3 years ago
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Trucking StealthTrader
2 years ago
Hanging on to your support
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clifkix5
3 years ago
This is an update from my previous chart. The big thing I'm watching is to see if it bounces off of this uptrend line then plummets. We are coming up on some key moments right here. We will see what kind of move the DXY takes
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QuantitativeExhaustion PRO clifkix5
3 years ago
Nice drop 9-16, mind your gaps.
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Taking a look at EMA and Bollinger Band Trend
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Trucking QuantitativeExhaustion
2 years ago
Great analysis
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A new analysis by a think tank shows that Washington's drop-dead deadline for the debt ceiling could hit as soon as Oct. 18.
Estimating exactly when the Treasury Department will be unable to pay all the bills coming due if Congress fails to raise the nation's legal borrowing limit is notoriously difficult.

That's why, in an analysis released Tuesday, the Bipartisan Policy Center put the "X date" between Oct. 18 and Nov. 5.
Treasury Secretary Jack Lew has warned that by mid-October the agency will have only $50 billion in cash on top of incoming revenue.
That may sound like a lot. But, as the Bipartisan Policy Center details, it won't last very long.
If the "X" date turns out to be Oct. 18, Treasury would run about $106 billion short of the money it owes between then and Nov.15. That means it wouldn't be able to pay the equivalent of a third of all the bills due during that period.
Timeline: 3 crazy years of fiscal follies ... and counting
Here's why: Treasury handles about 80 million payments a month. Those payments are not evenly spaced out so on some days more is owed than on others. And the revenue flowing into federal coffers is unpredictable and varies from day to day.
Payments include IRS refunds, Social Security and veterans benefits, Medicare reimbursements for doctors and hospitals, bond interest owed investors, payments to contractors and paychecks for federal workers and military personnel.
If Congress fails to act in time, Treasury will have to make difficult -- and legally questionable -- decisions about who should get paid and who should be stiffed. It may decide to pay some bills in full and on time and not others.
Or it may decide to delay all payments due on a given day until it has sufficient revenue on hand to pay in full. A report by the Treasury inspector general has said that this might be the most plausible and least harmful approach.
But under that scenario, delays would grow over time from a day or two to several weeks. For example, the payments due to seniors, veterans and active duty military personnel on Nov. 1 wouldn't go out until Nov. 13.
In any case, the expectation is that the agency will try to prioritize payments to bond investors over everyone else, lest the financial markets go haywire. Politically, of course, that carries risk, said Steve Bell, the senior director of the Bipartisan Policy Center's economic policy project.
"There's a political danger you'll be accused of paying bondholders over Social Security recipients," Bell said.
On both Oct. 23 and Nov. 14, $12 billion in Social Security benefits come due, while another $25 billion comes due on Nov. 1, according to the analysis.
Related: Just the facts on Washington' s budget brawl
Meanwhile, on Oct. 24, Treasury will have to roll over $57 billion in outstanding debt and another $115 billion on Oct. 31. Normally that's not a problem, because U.S. Treasury auctions attract a lot of buyers willing to purchase bonds at low rates.
But if those rollover dates come after the "X" date, and the perception is that the United States is defaulting on some of its obligations, Treasury could have trouble finding enough buyers or investors could demand higher interest rates.
The debt ceiling is currently set at $16.7 trillion. That ceiling was reached on May 19, and ever since Treasury has been using a host of special measures to keep the country's borrowing at or below that ceiling. But those measures will be exhausted by mid-October, according to Treasury.
If lawmakers want to raise the ceiling enough to get past the 2014 midterm elections in November, the Bipartisan Policy Center estimates they will have to raise it by $1.1 trillion to $17.8 trillion.

http://money.cnn.com/2013/09/10/news/economy/debt-ceiling-bills-coming-due/index.html
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clifkix5
3 years ago
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We dropped through upwards trendline. Next support around 80.7. Hopefully this will continue it's downward march. it will be interesting to see how fed meeting will affect DXY tomorrow
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QuantitativeExhaustion PRO clifkix5
3 years ago
Sill stuck on idea of picking this up at 78.90 into U.S. Political drama in 4-6 weeks.
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Come to Pop-pa
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Very close
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osci QuantitativeExhaustion
3 years ago
JR your schedule might fit to the european debt problems which could pop up after yesterdays elections in germany. this could weaken the EUR. so far i am not fully convinced that the eu will start printing money.
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That's a good point. I have not been following the Europe news and elections as close as I did in the past. Going to wait and see a Merkel post election speach. Think she might have enough courage to state, ' we need to weaken the Euro to be more competitive globally'.
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osci QuantitativeExhaustion
3 years ago
honestly i do not believe her to do this. the relativly strong euro is a problem for the bad south-european states. not for germany itself. even a stronger euro would do no harm for germany or austria. both countries produce quality/know-how products. but the southern states would need their own currency to come on their feed again. but this will not happen too, i believe. so more debts could be underway to help the southern countries out...but thats just a limited guess. watched the live speach of draghi today. and the are talking about the european way of QE. which would be against the law. but i believe too, that the Dollar has some bright months to come in future!
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Right now, I can't see US Dollar DXY flying without Eur/Usd falling.
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osci QuantitativeExhaustion
3 years ago
your charts works out nicely! and the euro is still rising...and the 79,50 trendline + fibo is near. will it hold...?
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I'd like to see that chart
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Budget deal/Debt Ceiling ...

Kaine said Reid is considering offering an amendment that would provide only enough funding to keep the government operating through Nov. 15, instead of the Dec. 15 date contained in the House-passed bill.

Kaine said Democrats hope that a shorter time-frame for temporary spending might better foster negotiations on finding a substitute to the across-the-board spending cuts that began in March.

Those indiscriminate spending cuts, which hit defense and domestic programs alike, are deeply opposed by Democrats in the Senate and House.

Once the battle over government funding bill is resolved, Congress will quickly focus on another potential fiscal crisis - a possible and unprecedented U.S. government default unless it agrees to raise the $16.7 trillion U.S. debt limit by sometime next month or early November.

Republicans are expected to place a number of demands on any bill to increase the debt limit, including one to delay for a year implementation of Obamacare, which is now set to begin to fully kick in next month.

>>
Problem is we don't have until Nov. Treasury will not have the cash flow nor the emergency reserves to push us past Oct. 31st.
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Date to remember

U.S. Coinage Act
New York, NY
April 2,
12:00 PM 1792
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Two Meeting lines that have seen big bounces either way
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Food4Thought
3 years ago
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For your consideration, immediate short term Cypher pattern unfolding, may morph into a Shark or 5-0 as it matures.
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QuantitativeExhaustion PRO Food4Thought
3 years ago
Excellent Work FFT. This trade looks primed. >> Fibonacci Cluster + Harmonic Pattern + Trend Lines
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QuantitativeExhaustion PRO Food4Thought
3 years ago
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ABCD override
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
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My mistake this was a miss
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Trucking Food4Thought
2 years ago
Never gained
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Food4Thought
3 years ago
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Deep Bullish Crab: commonly formed on deep retracements to support levels. Is uniquely identified by its 0.886XB relationship, D point is usually the 1.618 XA level, but may extend to touch extreme targets at the 3.618 BC.
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QuantitativeExhaustion PRO Food4Thought
3 years ago
That would be extremely positive for the markets
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Food4Thought
3 years ago
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Both Deep Crab and Cypher overlapping.
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QuantitativeExhaustion PRO Food4Thought
3 years ago
So which one do we favor ? Short term Cypher or Longer trending Deep Crab-Cypher overlap
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Food4Thought QuantitativeExhaustion
3 years ago
Watch the key fib levels as price approaches, and wait for fundamentals to align with the price points. The Deep Crab is notorious for hitting it's 1.618 ext. during news event risk, and as I'm sure you've noted, can be so far off the chart that it's only with foresight that the pattern gets recognised and becomes trade-able. Bearing all of this in mind, both are simultaneously unravelling, and at present the 1.13 level is holding the DXY up, failure would open the way for the next Cypher C point. The Deep Crab should only be traded once price has extended beyond the maximum C point for the Cypher, as that is the only point at which the Crab should be traded long. Hope this helps, it would be more straight forward were there only one pattern unravelling, but that's trading for you.
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QuantitativeExhaustion PRO Food4Thought
3 years ago
Very interesting. Not a harmonic trader by any means. One of my weaker TA investing approaches. This information is very helpful. I'll be watching for critical points (trend lines, Fib clusters)
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Food4Thought QuantitativeExhaustion
3 years ago
I'm secretly hoping it guns for the 1.618 in the Deep Crab so you can see how price goes there from out of nowhere; subsequently, 80% of the time, price will bounce within 10 pips of the level to hit targets at fib retracements before you know what's happened.
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QuantitativeExhaustion PRO Food4Thought
3 years ago
We could get both, partial and full pattern imo. Maybe we target Cypher 79.10 - 79.67 = weak/failed cypher to 81.11 - 81.37 and follow that up with a move to sub 78
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Food4Thought QuantitativeExhaustion
3 years ago
Entirely possible, but I tend to move on once the ABCD itself starts to change as I consider it a weakness to the overall pattern and it's probability of success. There are Harmonic traders who will trade it regardless, as the patterns still tend to offer a reaction in the subsequent PA. All the best however it plays out.
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QuantitativeExhaustion PRO Food4Thought
3 years ago
Can a Three Driver Harmonic Pattern exist within a trending Deep Crab-Cypher overlap?
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Food4Thought QuantitativeExhaustion
3 years ago
Strictly speaking the origin of a harmonic pattern is derived from Elliot theory and the formation of impulsive waves and their corrections etc. I know that the best patterns are clean XABCD structures/very clear to identify. I also know that so long as the extreme price points are not violated before reaching the next target, then the pattern is technically still in play. The trouble is you want as many traders as possible to see the same pattern/measured moves. A structural break down leaves the door open for traders to become dissuaded, and thus discard the setup, in turn eliminating some of the impulsive force that one would expect at the final D point. In short, yes a three drive can be present in the leg towards the D point assuming the structure is intact, and would even help if it aligned with the final 1.618 XA target.
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StealthTrader
3 years ago
Great timing
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QuantitativeExhaustion PRO StealthTrader
3 years ago
Thinking we overshoot on the dollar very soon and get a big snap back bull market.
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Possible entries
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Update... getting very warm
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
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Trucking QuantitativeExhaustion
2 years ago
Just never warmed up
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probably not going to reach my target
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JayJay QuantitativeExhaustion
3 years ago
hey man, you should do another one of these for the coming period..
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