“Because in the real world their shuttin Detroit down
While the boss man takes his bonus pay and jets on out of town
DC’s bailing out them bankers as the farmers auction ground
While they’re living it up on Wall Street in that New York City town
Here in the real world their shuttin Detroit down”
Indeed, Mr. Rich, indeed. But it’s important to remember one of the primary reasons why the USA has exported its manufacturing base to foreign lands: agricultural exports.
American agribusiness wanted to break down the trade barriers to their products in places like Mexico and China. However, those countries knew that if they allowed big American companies to wipe out their small farmers, those farmers would move to the cities looking for jobs.
So, deals were struck. American agribusiness got to expand their exports, and nations like Mexico and China got to expand their manufacturing exports to the USA. Many of the small farmers who were displaced now work in factories that used to be located in the USA.
If the farm states weren’t over-represented in the US Senate (on a population basis), the USA’s trade policy would likely be quite a lot more rational.
Dollar bulls swamped the dollar-bullish exchange traded fund ‘UUP’ on Friday.
WSJ: Strong demand for instruments that take bullish positions on the dollar prompted one such exchange-traded fund to be halted on Friday, after it ran out of shares.
LOLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL
Matt, I hate to pester you with fractal questions, but do you know where I can see a C++ or C# version of Carlos’ algorithm? I’ve found a good charting platform I like and it allows you to insert a formula for custom indicators. But it has to be in C#.
SSI,
Sorry, no. Have you tried asking in the discussion forums of your trading platform?
Matt
2thficr i know your wave count on UUP but just look at the dollar and euro indices
http://blog.afraidtotrade.com/year-to-date-elliott-and-momentum-look-at-the-dollar-and-euro-indexes/
Good thinking Matt. Had not thought of that. Something has to be done about lobbyists to make democracy work.
Prechter has been a huge dollar bull for a couple of months now – he was a little early to the party – but could Prechter be right again?
The market’s sideways action in response to a stronger dollar shows just how resilient it is. Maybe we have a fight between a Santa rally/end of year mark-ups to make mutual funds look good and gosh darn economic reality.
My guess is we will see people back in disaster mode after the holidays and the long awaited double dip will begin in earnest.
Thanks to all the posters here, the commentary and links are just outstanding.
retail sales losing nearly 15 billion today and tomorrow thanks to the snowstorm in the east. they have weather to blame rather than economy
Larry,
Two ways to take care of lobbyists. Provide public
money to run for office. Vote incumbents out of
office six straight times. As a plus…in the U.S.
break the two party hold on power. We will need
your money to do that.
{Apologies ahead of time for the long post–sorry! Hopefully, there are some great nuggets for fellow readers to digest and think over. And always remember, the information presented is worth what you paid for it: nothing!}
Great points Randall. Not sure Prechter is always right, and he is ALWAYS early with his market calls. Remember, we should all be 200% SHORT right now!!!!! There might be a lot of financial pain, many sleepless nights, and possibly margin calls happening to investors that followed that advice from last month.
Yes, K. I am aware that everyone else is saying a bottom is in for the dollar based upon 5 waves completing. No doubt, they could be right.
The defenses to my purely amateur EWT count are these:
1) making a regression channel (so I couldn’t manipulate the trendline–the charting software made the trendline based upon the start and finish price bars chosen) & sizing the outside channel walls based upon price highs and lows within that downward move, I didn’t see any price action that indicated a wave 4 or 5 outside of that wave 3 downward channel. Using Fib analysis, you can clearly see why I expected a move back to the $23 range and provided the circle on the chart. Also, a move down in the dollar would support a topping wave 5 that appears due in gold, oil, and the stock market. How far, how fast, and when are all questions nobody but Golden Slacks can answer.
2) Bottoms and tops typically have some sort of dismay/panic or euphoria/mania (respectively) associated with them. I agree that there was some definite concern over the dollar falling, but not a major panic. To quote a government official (whose name escapes me at the moment), “The dollar is suffering an orderly decline.” Was it Tiny Tim, the Prez, or Helicopter Ben???
3) The Fed is CLEARLY showing NO signs of raising interest rates, and with other countries slowly but surely moving their rates higher (anyone long the Norway Krone?), the dollar will lose ground to them. Damned if the Fed does raise, damned if they don’t at this point. I realize that the AUD/USD carry trade hasn’t been working in December, but at some point, professionals are going to start seeking that interest rate spread again unless Ben “Rates will remain low for the foreseeable future” Bernanke grows a pair and makes a token rate hike.
4) I think the EU is in worse shape than the US, economically and in the banking sector. Yerk would be the authority here to speak to that situation. Also, Japan (Larry?) might be having debt to GDP issues affecting their currency. So, the US has moved from the worst First World currency to passing a couple of currently economically weaker currencies. One possibility for this rally could be the weak carry traders unwinding their positions in foreign currencies and gold (for any number of reasons, including prudence on their part with a parabolic gold move).
5) Until we get a backtest of the channel, or correction within this new uptrend, we won’t know if this move truly is a reversal from a bottom. Remember, the $USD index has a double dip low around 70 and change from a few years ago. At this point, we have only visited the higher low around 74 from that same time period. De ja vu all over again, Yogi? Maybe we’ll retest that lower low?
On a side note, that is tangentially related to this topic: I was doing some Fib work on the $SPX and found a FIB argument for 1180 being the TOP we have all been seeking. Consequently, that further supports a wave 5 drop from here in the dollar to help propel the market to that higher level.
The basic argument goes like this: The market started a rally in March at 680 (first candle of the uptrend, not the absolute bottom–Constance Brown always cautions against using the absolute bottom or top price achieved–I highly recommend her Fib book) and a target of 1180 creates many Fib values that FIT the price action from March until now very, very well. Which is what she will tell you are looking for at this point of a market move. Just as technical analysis can tell you the price target from H&S formations, triangles, and rectangles, FIB analysis can help predict a future price target, reversal targets, etc…
For example, the 680—-871–930–989—-1180 Fib spread shows price respect in the following manner: 871 is the April Top, July Low. 930 is the May Top, June Top. 989 is the Aug Low. Similarly, 1084.5 shows strong internal Fib convergence based upon these values, and may be the reason the bottom of this rectangle has been such strong support.
Given the price action to match the Fib ratios built off the 1180 Target Price…ya gotta respect that target until proven otherwise. [The Fib ratios built off a top of 1119, 1130, or 1155 (the latter being the price target if the rectangle resolves to the upside--which I obviously think will happen) don't fit the price action--I tried them out too.]
The dollar action should help us determine how things are going to play out…stay tuned. But as Matt and George always say–let the market tell you where to invest…because it will!
Julie, you or Paula said you had a personal household inflation indicator. I would be very interested to get an update (whether deflated or inflated).
2th, been long Norwegian Kroner. Now I am just throwing it all over the place – diversifying like a headless chicken.
20 Short
Reminds me of Wall Street and ‘The Greenspan/Bernanke put’
http://www.abc.net.au/news/stories/2009/12/18/2776142.htm
2thfixer, very thoughtful post, thx. Dubai is more relevant than Greece imo. (Large states in Germany contribute more to the European gdp than Greece, it is like Tennessee, Colorado or Wisconsin to the USA). Dubai is forced to liquidate international assets now.
1180 is in line with my preferred EW count’s top target.
This is one is very interesting… Bottom in the LT rate would mean that HE of all persons believes QE is coming to an end?
http://www.calculatedriskblog.com/2009/12/bernanke-arm-ok-head-explodes.html
Larry,
Inflation here is at 6.8%. It looks like the
health bill will push it up.
Larry and Yerk,
Tim Wood has an interesting article on
safehaven. He calls it phase II…I call it
a C wave. Agree with Tim on where it
will take the market.
Julie, thanks for that. Will read the article on Phase II.
Link to Safehaven/Tim Wood article:
http://www.safehaven.com/article-15308.htm
http://lh5.ggpht.com/_APmrYvpA45s/Sy3H8uptdxI/AAAAAAAAF48/0TtscCb1tQo/s1600-h/BuyingClimax2.png
http://lh3.ggpht.com/_APmrYvpA45s/Sy3H9tQjlMI/AAAAAAAAF5E/m50Xv0LOrrA/s1600-h/net2.png
Julie & Randall, thanks for the safehaven link.
Marty Armstrong’s forecasts:
http://www.docstoc.com/docs/19898465/The-Dow-the-Future-Theory-Myth-12-6-09
http://1.bp.blogspot.com/_rufrpeKdZ38/Sy6PsTUTdoI/AAAAAAAAF54/N9zoZd4z58c/s1600-h/spx.png
K, try drawing these lines at a dax chart…
“This is one is very interesting… Bottom in the LT rate would mean that HE of all persons believes QE is coming to an end?”
Yerk, while I can’t know what Bernanke’s loan was indexed to, I would tell anyone I know in America that it won’t get much better than 4.75 on a thirty. This also goes to 2thfixr’s 3rd point. Bernanke could pacify the interest rate crowd with an increase but that was not the tool that was used to do the heavy lifting and in my opinion won’t siphon off much.
Quantitative withdrawal should be the tool of choice – a lot less blunt. In fact, it’s so sharp a tool that desks won’t “surprise” one another. I just can’t imagine a sharper clerk than the one we have now – other than Geithner.
http://www.calculatedriskblog.com/2009/12/greece-dubai-updates.html
http://blogs.reuters.com/rolfe-winkler/files/2009/12/dubai.jpg
K,
What happened to Junglegirl?