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Does America winning the Currency war?

 

Does America winning the Currency war?

cb98e451d2d737f5862b52525f222ea4.landscapeEven if I don’t like this statement…. I have to give credit to USA and they strong dollars. If there’s one thing I can say where’s United State are good at , it’s in the manipulation of they dollars, and they deserve it, after all effort they put to become a world currency.

The simple reason why I still give United States the “world power”, is simply because they control the world money, by being the world currency. I think in they case, they don’t really need to own gold, as others country…since the man who control the price, can buy anything right? You can have all gold you can find, it doesn’t mean you are rich, if gold doesn’t worth anything.

 

us dollars history chartAnd knowing Gold and silver are creating new low again and again, because US Dollars value go up…. we need to see where’s the next turning point in the Dollars, so Gold and silver can get a break!

Few weeks ago, I was thinking by touching the red down trend line at 89$, dollars will go down and gold up….I was wrong. Since it did not happen, I start to look for the next turning point, witch will be at the “orange line”. at 96-97$ on this chart.

 

silverOn this chart Silver is at 2000price, witch it’s equivalent to 15.5$ currency price.

The fat red line, represent very strong resistance, if silver go below this trend line, the next ressitance will be at about 9$ and then 5$/oz

I’m sure people think I’m crazy to see Silver that low…and saying this is impossible… but not long time ago, when silver was at 25-20$…many people was also seeing im crazy to see silver drop at 15$ price range.

GC 02-15 (Weekly)  Week 20_2012 - Week 1_2015<– this is a quick Gold chart where you can see how Silver and Gold are struggling to stay above the present bottom price.

By being in a pennant..we should see the next long term direction very soon.

For Gold Price target and direction, see past Blog post, by Joel Wissing.

 

 

Natural gaz History ChartSince I know some people who are looking to buy Natural Gaz right now because they think it’s over sold. I decide to get this chart , where they could see in a very long term the Natural gaz price movement.

If you analyse properly…you will understand, that see Natural Gaz at 3.3$ is not a big deal so far.. and the bottom price , it’s at about 2.2$, when it touche the Green Trend line ( bull Trend)

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Oh Ya ! let’s go back on US Dollars , Oil, Gold and Silver….next movement…

oil price vs dollarsYou have to understand…the reason why US Dollars keep moving Up, it’s because oil price get cheaper and cheaper. And everyone know the reason it’s because of OPEC ( created by United State with the Petro-Dollars) who are doping Oil price on purpose, to please USA…  And knowing Arabic Saudi are loosing a lot of money right now, true cheap oil… the day they will decide to bring the Oil price back to the tops, USA will start to loose the currency war… The key question it’s if it will happen soon enough, before we see gold and Silver, going so low, so it won’t go back any time soon to create new all time highs.

make-it-simpleLet’s Simplify all this information!

They important think to understand is :

  • When US Dollars going UP, Gold and Silver price going Down.
  • To change Gold and Silver price, to go Up again, you need to change US dollars, present momentum.
  • to change US Dollars Momentum,( go down), you need to change the cause of US Dollars going Up, witch it’s OPEC decision to bring the Oil Price down on purpose.

Two know what to do… Watch OPEC release news

 

oil Crude oil is testing a strong Bullish Trend ( green line). And it’s why we can see Oil price stop at 50-55$.  We could see it go back to 80-82$, and then retest the Bullish trend line. This will give a break for pretty much every country who export oil.

If ever they succeed to break 50-55$ range, this will be catastrophic for everyone, are a world recession may start. And the bottom price will be at 40$

If…again , we break the 40, next price range will be 40-20 and this is very bad, since it can stay in this range for very long time.

But since it’s the OPEC who control the Crude Oil price, and it’s more a political game between Russia, USA, and Arab Saudi ( witch are loosing a lot’s of money right now in this game)…I really don’t think anyone will consider to drop Oil under 40$..

Trading in 2015 – the unknown is what to watch out for.

crude oil trading for 2015

 

Trading in 2015, with all the news and international political personalities influencing the direction of the dollar, Euro and Oil, the real volatility comes from not what we know, but what we don’t know.

crude oil trading for 20152014 trading has shown us that the outliers have the most influence in the markets.  Who could have known that we would see a decrease in oil prices that would take us to $54 a barrel, or that the dollar would strengthen and consumer confidence would go up in the US again, or that Obama care would be such a large percentage of GNP.  Oil prices have an anesthetizing effect on consumers as they quickly use this windfall from falling gas prices to buy their new widescreens and Amazon devices. A definite boost to the economy. It was amazing to see our street this year as delivery truck after delivery truck zoomed down to drop off deliveries for the holidays.

Oil trading in 2015

2015 oil trading could see a break of the $54 support and a move to under $50 a barrel prices.  If it does break the $50 mark, it could be a very short term capitulatory spike with a reversal back to the $50 area.  The move back to the 200 MA is where the markets could settle in the long run or mid 2015.  Expect to see the market test the lower support at $46 then $43.  Remember the Saudis said they can support this all the way to $27.  We are going to see Oil sands in Canada getting hit and west Texas crude rigs shut down over the first half of 2015 with a decrease of US oil production and then a demand driven price increase later in the year.


 

Index Trading in 2015 as we are reaching new weekly highs, could see more complacency on the small investor side, as they let their money ride this wave. Short side sellers, that have been beaten into submission from the buy, buy, buy signaled by the quants and market makers still eek out a call of “the market could fall” vs. the chicken little calls of “the sky is falling”.

Index trading new paradigm into 2015

Index trading in 2015

The S&P500 has a new paradigm in trading running for the past few years as we are seeing faster rise than sell offs.  The price action used to be 10x the speed for a falling market with the ensuing gradual rise to previous highs taking weeks if not months.  An underlying characteristic in this new price action shift is that the retracement by buyers is swift and targets not a double top but an extension.  The velocity which buyers have moved in the market has out paced sellers.

I am expecting to see more tests to the 200MA with same extensions repeating themselves through 2015.  Watch for more volatility to come from these unknown outliers as the reality of falling gross income and increasing unemployment weave their way into the US economy and manufacturing shifts occur through out Asian economies.  Most likely scenario is the grinding up we have seen. Watch for tests of the 2000 level and move to 2560 through the 2015 year. More consolidation looks possible.  Sell off levels to 980 if there is another crisis(doubtful).  Expect Volatility, larger price ranges intra-day and 2-4% swings on profit taking and market maker plays.


Gold trading in 2015.We have seen the same transition in the Gold market where the “gold bugs” have been beaten down.  The risk off trade is to the dollar, not gold.  Gold is too volatile to be held as a risk hedge.  Gold is held as a “Disaster Hedge” when there is a threat of war or some devastating economic turmoil. I coined this term since 2005.

Gold trading 2015 supportGold Trading in 2015

The gold markets volume has changed dramatically changed this past year and we might see less participation on the individual investor side.  If we have falling demand for gold in the derivatives market, it means would could see some extra price volatility in the daily ranges.

Watch for lack of commitment on the gold buyers side in the volatility. This means we could see a consolidation zone being followed by sell offs to new levels. If we were to see a continuation in direction with the $360 annual range, we might see tests to $780 range.  The gold market is still in control of sellers until it gets above $1246. Remember there is no rational sell off or real price to be attained and the price could sell off to even the $600 range or more if there is some type of capitulation or default in the derivatives markets.  If there is then the upside would be to previous swing highs $1360, 1580 then 1800.  (not likely)  Expect to see gold breaking to $1300 and the volatility to increase.  If we get above $1380 welcome back the bulls.


Dollar Index trading in 2015

The dollar index has been our major focus in our proprietary fund this year. The dollar index has been the major influence on price action in the major pairs, index trading, Gold and Oil. There has been quite a bit of volatility with momentum to the upside working in favor of most trades, mixed with oil price adjustments that have hurt many USD trades as the economies of the oil producing countries have some what cratered.

Dollar index trading 2015The key to the next year will be in trading the Dollar index and the price levels of support and resistance.  We are posting a long term chart with some upside targets.  Remember markets don’t normally move straight up or down and we will of course see some pull backs as the “unknown’s come in to play”.

If we have a continuation of the present direction of the dollar index we are targeting 92.56 and 99.10 for major resistance.  This could take many months and watch for some consolidation  for an upside continuation to occur.  The dollar index has plenty of buy side momentum and could continue for the next year at this rate. The five year decline from 2002 to 2007 and the ensuing 2 years of consolidation in a 4 point range from 2012 -2014 built enough pressure in the market to bring us up over 10 penny in 6 months.  There seems to be no let up on the buyer side which could keep this direction.

The dollar index has broken above the 200MA on the monthly chart, also above the 28.2 retracement an has a clear path to new highs. This is a long term perspective and the market does not move straight up or down.  Presently the Dollar index is at resistance and sellers could come in for profit taking.  Expect to see the dollar index strengthen as Europe Falls Apart.

 


The biggest Outlier that will effect economies will be QE and central Banks.

foreign currency trading outlier2015 will give us a roller coaster ride in currency manipulations.  Expecting to see weakening in the Euro as risk adverse economies will move away from the peg against their currency.  Watch for China to step in doing their own type of Quantitative Easing that will increase the range of their peg to the US Dollar.  This will cause a wild ride in the markets especially if the Hong Kong dollar is allowed to trade on the open market with out the Peg.  This is where we will probably see it first, then by wider margins to the Chinese Yuan.  Since all the worlds Central Banks are buying their own debt and investing in the stock markets we could see strength in the US markets and Dax, followed by small corrections relative to their buying patters.  Expect to see profit taking along the way.  This means more volatility.   Trading in 2015 will experience larger daily price swings and a lack of direction.

 “China is the wild card for bonds and currency manipulation, weather they do it through Hong Dollar first or Quantitative easing, expect some market volatility.”  Joel Wissing

Inflation Vs. Deflation

The world is finally coming to grips with the “Quantitative Easing” experiment, Keynesian economics is a failure and consumers will gradually be reacting to the incredible disparity it has created across the board.  Deflation is coming and it is a sign that the hyper Quantitative easing has forced this slowdown, and we can expect to see markets shrink, economies slow and major banks to hold out their hand in support. QE in Japan has been a failure and their model has shown that deflation will occur.  More QE will just prolong the disease, stemming a few of the symptoms but not curing the problem.   It is so irrational that I can’t fathom where the idea that inflation is good for anyone.  The Japanese, which have an aging population with the highest savings rate in the world, are crippling their retirement population by pushing inflation.  They should be going the other way.  When price go down people shop, when price go down people buy.  It is when prices go up that consumption goes down…Wake up.  You don’t raise prices to help an economy, you raise prices to help bond prices and the banks.  Time for a change.

 

 

Gold Trade – End of year targets

Monthly Gold chart price action

 

Gold Trade End of year targets and where are we headed for 2015.

Gold trade - 2014 targets gold tradingGold daily chart. There are two ways to look at this chart.  The traders expecting gold to bottom and start it’s bull run and the Dollar index traders looking for new highs and corresponding Gold collapse.

2014 saw a yearly high of 1391.71 and low of 1131.85 giving the gold market a yearly $360 range.

With the Yearly range in mind, let’s take a look at a monthly chart and see what the price action for Gold has been.

Monthly Gold chart price actionMonthly Gold chart Support and Resistance and possible direction.

Gold has broken under the major support at $1200 and has spent the last two months testing new lows on this bearish cycle.

You can see in the previous chart the 200 day Moving average for gold is coming in the $1254 area and this is the resistance which traders are looking for the turn around and break of this major down trend.

The short term support under 1200 comes in at 1050 and then a full extension would take gold to $840 with a capitulatory target in a major sell off to the previous swing lows at $675.

Remember there are no “rational levels” when trading the volatility of gold and high risk markets.  The Dollar index, political pressure and banking manipulation will have a lot of effect as this 2015 keeps course.  We have pressure in a declining world economy out of Europe, Russian and even China that could start a continuation of this “super cycle” in commodities.

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