I spoke too soon when I congratulated bears over the weekend for keeping their cool. On Monday they were in a full-blown panic, desperately trying to cover short positions they regretted not having exited on Friday. The broad averages easily recouped Friday’s losses and looked hellbent on recovering the even more significant losses from earlier in the week. Although I strongly doubt the rally will hit new record highs, I’ll be ready for it nonetheless if buyers obliterate just a few more prior peaks on the hourly chart without pausing for breath. Were that to occur, I would grow even more wary of the possibility that a move into record territory would set up Mama Bear’s onslaught perfectly. Permabulls would be giddy at that point with visions of Dow 30,000, while bears would be even more “bullish” as the pain of fighting the tape became not merely pointless, but excruciating. For now we’ll put aside such speculation and focus on the lesser charts, where virtually every significant trend change must begin.
Short-Covering Panic Could Help ‘Set the Hook’
- March 27, 2018, 6:22 am
Our latest outlook of 4 to 5 percent growth, and that – “We’re on the front end of the biggest investment boom in probably 30 to 40 years”, to have the same accuracy as his late-cycle predictions in 2007 and 2008.
“There’s no recession coming. The pessimists were wrong. It’s not going to happen. . . . The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come.” – December 7, 2007
“Banks are taking significant steps to repair their balance sheets. Even though some people might not be happy with the speed, the reality is things are improving.” – January 16, 2008
“I’m going to bet that the economy will be rebounding sometime this summer, if not sooner. We are in a slow patch. That’s all. It’s nothing to get up in arms about.” – February 5, 2008
……….A currency crisis is a situation in which serious doubt exists as to whether a country’s central bank has sufficient foreign exchange reserves to maintain the country’s fixed exchange rate. The crisis is often accompanied by a speculative attack in the foreign exchange market.
A currency crisis at level DXY 87.627 will appear moving towards a 20% further decline in value over a very short period of time. This will move markets towards a Financial crisis which attacks the value of held assets.
New highs are doubtful at this time, lower 10-20 trading days lower highs are in the timeline but after a few days they become even doubtful too.
The quarterly breakout in GC taking place is a suggestion that 1327.0 level is now a long term floor. And, that the markets are having a turning point such as the 297.9 GC level in 1999. Breakouts such as these are rare and start large trend changes to the longer and larger degree.
Its hard to vision a DXY 78.100 level at this time, or lower 72 level and, just what it will mean.
Have a great day today and Passover and Easter, as the ‘season of sacrifice’ is in play.