Here are this weeks closing prints. I have chosen the theme to be the “Dollar Dumps on Trump” because I believe that the dollar has started to dump right before Trump gets inaugurated.
Look at these first charts below. all of these made the moves or held where they were suppose to while the dollar was “breaking out”.
$EEM – Emerging Markets
WHAT A CLOSE! No one wanted to buy the emerging markets down at 34 and everyone thought that they were going back below $30. Then, everyone kind of forgot about them when they bounced. Well guess what, I have been watching them and they have been signaling this dollar breakdown for the past 3 weeks. This week EEM closed on the dead highs and will likely test 38-39 in the near future. This was my chart of the week last week and it is turning out to be a doozy. If the dollar rolls over I see EEM going to 44+ in 2017.
$EURUSD – Euro Spot Price
The euro held multi year support like a champ. I have said the bears fumbled the football and while the dollar was “breaking out” the euro WAS NOT breaking down. Big time volume has come in on this reversal and I believe this is only just the beginning. Euro will be seeing much higher prices in 2017 and I am thinking 1.10+ minimum. I am pounding the table on this Euro and no one is talking about it right now. Everyone was talking parity and then the Euro drifts off into the distance…not towards parity.
$DXY – Dollar Index
The dollar bears came to play ball. Just when the bulls thought that dollar was leading the charge, last week it reversed big time. This week there was follow through with a close BELOW the 50 day moving average. It is very likely the dollar WILL test 100 and what happens there will likely be the biggest dollar inflection point over the past 3-4 years. If 100 holds you probably see 110. If 100 does not then this is a failed breakout and the dollar is testing 97, then 92. I am voting the latter. The dollar has killed emerging markets and, quite frankly, the world has had enough of this. The dollar down and everything else up is the play. Thank the economist for it 😉 .
$USDCAD – Canadian Spot Price
I have been writing that either the Loonie or Oil was lying and I did not know which one. With the dollar starting to break down, it looks like the loonie was lying and has a long way to drop. A close below 1.30 will set in motion a massive bear flag and this should test 1.25 and maybe 1.20.
$USO – Crude Oil
With the loonie breaking down, this sets in motion oil higher and the test of 63 will be very likely. Oil is holding above 51 and if it continues then 63 is happening this year.
$GLD – Gold
Remember when I was telling you about that time that will matter, “What happens next”? Well that time is NOW. Gold has bounced back to 1200 and SHOULD NOT drop 1150-1160 ANYMORE. If this is a bull bottom then that will hold. I prefer sideways or up I do not want to give any of this back. Miners are flagging and looking very promising.
$SLV – Silver
I put this chart in here because I wanted everyone to see. If we are right about silver and gold being a true bottom, look how far we have to go. Patience…the train is still at the station.
EWW – Mexico
I am long this. I love this chart. Mexico is in deep shit, their wages are too low, a wall is being built, they are burning gas stations, their pets heads are falling off. It’s equal to a dumpster fire. I want to buy it here, the peso may have topped. Targeting at least 48-50 against the lows is VERY good risk/reward.
DJIA – Dow Jones
As everyone is buying and buying and buying at the ATH, no one wants to seem to buy the 20K. I have been saying this does down for the past 3 weeks. My view has not changed. This comes down.
SPX – S&P 500
This comes down. Maybe one more high possibly to get some more schmucks long but then we will test at least 218-220. Buying this here intermediate term is hoping Trump saves America next week.
IWM – Small Caps
IWM is not believing the QQQ’s. And since IWM led the rally up, I am going to believe it over that. we will test 128 before 145, believe it.
QQQ – Nasdaq Tech
Strong. Powerful. Can’t argue with it. but it better not hope the DJIA and IWM roll over because if those get hit 10%, QQQ are going to get hit 20%. A lot of downside here. It can see 112 quick in my eyes.
FTSE – London 100 Index
I am short this. It may be 2-3 days or 2-3 weeks. But THIS is out of control. the H&S target has been met and this is coming down. I expect a test of 7100 AT LEAST at some point before much higher prices. BIG TIME short squeeze to close out the week too.
It all makes sense. These are still Barry O’s gains on the transcript. I would not be surprised if the market gets slammed right when Trump takes office…
See you next week.