The collision of global markets and social mood

Tuesday, March 24, 2015

Tuesday -- Speculations & The Special Situation Of The Year

ES Futures:

Reuters -- "Britain sees no inflation in Feb for first time on record."

Deflation is spreading.

Heard a trader say yesterday that "the dollar is over!" (same guy who, back in 2006-2007, said that anyone who thought the S&P would retest its 2003 lows was "dreaming").

Suppose he's correct, however: perhaps it's why the charts of the yen and the dollar index suddenly look so similar.

Jim Rogers preaches the mantra that one should always bet against central banks, with the recent action by the SNB being the latest example of its efficacy.

I fully agree with Rogers.

I do not believe that Japan will be able to destroy the yen as much as they'd like.

I do not believe that the Fed will be able to destroy the dollar just yet.

What follows is some on-the-fly speculation.

Perhaps if the dollar rolls over here it heads to a long-term low around 60. It would probably ignite the bond market to truly cause a bubble, bringing US yields down below those currently in Europe while yields (& the euro) in Europe could rise as Greece exits and hilarity ensues.

So too could the yen head to around the 60 level -- on a massive Risk Off move, as the Japanese carry trade finally gets closed when it appears that things are unraveling at home.

I have a very long-term chart of yearly dollar closes back to the year 1800. 60 is 150-year support.

From there, with Japan probably in trouble and Europe, China & US teetering, and when everyone declares the dollar worthless and dead, we could then get a taste of what we've seen in the dollar since 2014, only magnitudes greater, because it would likely be fueled by the final implosion of the bond market, causing massive deleveraging.

The dollar would then pop to unimaginable levels. And so would USDJPY (meaning the yen would weaken).

So if that guy is right, hang on.

Hell, hang on anyway. FX moves are becoming more and more erratic lately. And when FX gets erratic, things break.

The rally continues. As it should if the above is occurring...

Crude got above 47.80 last night on the continuous contract, so the door is open to higher prices (55+) or a more complex pattern, but I'm still not playing along -- the May contract did not get above the equivalent area (the Feb 26th low).

NG still shaky, but could rally in sympathy with crude if energy sentiment improves.

Still below 1200. Fish or cut bait.

S&P Outlook:
I get trolled for posting stuff about the moon. Screw 'em. Here's some more. It's the Bradley Model. Even further out there.

Notice the 12/26 in bold which coincides with the January S&P high (which is assumed to be wave 1 below).

Using existing rally and correction time cycles since Oct 2014 -- the supposed origin of the current wave form -- our rising wedge projects to June, and the important 6/9 Bradley date, in time for a June swoon.

My target for the swoon is 1750, roughly 20%, echoing the 2011 decline.

From there, a different pattern than a v-shaped bottom would likely take place, based on Elliott's guideline of alternation. But a ripping, riotous rally to new highs (2300+) could then ensue which would echo 1998 and 1999.

Oh, and the full moon is June 2nd.

Special Situations:
Given the above speculation in currency and the S&P, volatility should be considered to be a special situation for 2015.

No comments:

Post a Comment