Team, Welcome to another overview of the long term landscape of the market. It's been several months now since we've turned bearish on the overall market and although nothing seems to have happen yet, I just want to say that NOTHING HAS CHANGED (STILL BEARISH!).
* TAKE AWAY FROM POST: We're expecting to see
Now Let's get into this chart. So what we have here are three line charts (Dollar index - TOP GREEN , Gold index - MID GOLD and SPDR Index - BOTTOM BLUE). As we can see there something changed dramatically right before the market peaked in Sept 2018 and the melt down that followed through to the end of the year. What do we mean by this, prior to the Sept 2018 peak we saw the inverse relationship between the Dollar and Commodities (e.g. Gold, Silver...) (Red and Green arrows); however, once we peaked in 2018, both gold and the dollar have started to move in the same directions significantly (Purple Arrows) (dollar advanced ~ 20% while Gold did ~30% for the same period). By the start of the year we started seeing almost all the market moving in the same direction higher. Just another red flag that something isn't right in the current environment.
(NOTE: The volume chart was left out in order to conserve space, but it is absolutely necessary for better understand of Wyckoff method.
Also, only showing just an overview of the distribution schematic of the dollar. Will need to look at it own chart for full analysis)
another thing to point out is the fact that the dollar to be in this distributive Wyckoff pattern where:
PSY: preliminary Supply
BC: buying Climax
AR: automatic Reaction
ST: secondary Test
SOW: sing of weakness
UT: upthrust
MSOW: major sign of weakness
UTAD: upthrust after distribution (Rising Wedge in blue)
Now, we can't really confirm that this is truly distribution into we see a breakdown. By all means it could just be a period of re-accumulation, but this is very doubtful. Also the fact that the dollar has been rising in the Rising Wedge pattern is another red flag signaling that we may see a weaker dollar in the weeks/months to come. And goes the dollar, so does the market (Although this pattern was kinda distorted in 2015).
As always...
***Let's talk about it...***
* TAKE AWAY FROM POST: We're expecting to see
- A Weaker Dollar
- A Rise in Gold Prices
- A significant market pull back
Now Let's get into this chart. So what we have here are three line charts (Dollar index - TOP GREEN , Gold index - MID GOLD and SPDR Index - BOTTOM BLUE). As we can see there something changed dramatically right before the market peaked in Sept 2018 and the melt down that followed through to the end of the year. What do we mean by this, prior to the Sept 2018 peak we saw the inverse relationship between the Dollar and Commodities (e.g. Gold, Silver...) (Red and Green arrows); however, once we peaked in 2018, both gold and the dollar have started to move in the same directions significantly (Purple Arrows) (dollar advanced ~ 20% while Gold did ~30% for the same period). By the start of the year we started seeing almost all the market moving in the same direction higher. Just another red flag that something isn't right in the current environment.
(NOTE: The volume chart was left out in order to conserve space, but it is absolutely necessary for better understand of Wyckoff method.
Also, only showing just an overview of the distribution schematic of the dollar. Will need to look at it own chart for full analysis)
another thing to point out is the fact that the dollar to be in this distributive Wyckoff pattern where:
PSY: preliminary Supply
BC: buying Climax
AR: automatic Reaction
ST: secondary Test
SOW: sing of weakness
UT: upthrust
MSOW: major sign of weakness
UTAD: upthrust after distribution (Rising Wedge in blue)
Now, we can't really confirm that this is truly distribution into we see a breakdown. By all means it could just be a period of re-accumulation, but this is very doubtful. Also the fact that the dollar has been rising in the Rising Wedge pattern is another red flag signaling that we may see a weaker dollar in the weeks/months to come. And goes the dollar, so does the market (Although this pattern was kinda distorted in 2015).
As always...
***Let's talk about it...***
