Sunday, March 27, 2011

Which Way for the US Dollar Overnight?

This is the US Dollar continuous chart (/DX) on a one hour view of the past 10 days with my standard True Strength Index (TSI) indicator (7,4) setting. 
The trend line breaks of the TSI indicator did a very nice job of nailing 5 profitable opportunities to short the US Dollar within this timeframe.  It now appears that the TSI is about to signal a new opportunity to short the US Dollar.  I expect with this signal gold and silver will discontinue their fall of the last few hours and rally overnight.
Click on the chart to ENLARGE
I guess we'll see how it turns out in the morning. Good night.


  1. I am curious, what does the TSI say about SLV?

  2. any update on the signal?

  3. I just woke up, checked to see if I caught the fish, and, nope, it got away.

    The DX is right about where I left it last night. We got a 20 cents drop and a 20 cent recovery when the TSI fell to the ZERO line then bounced back up. That happens. It happened again.

    The DX is trying to go higher now but the TSI suggests it is mostly out of steam. Sometimes it can stay suspended, propped up, for a day or so longer than what appears reasonable, then it takes a sharp drop. My hunch is that is what is going on today.

    From what I hear it is options expiration for gold and silver and heaven only knows what "special interests" are showing up to persuade things to move in one direction or the other.

    At this moment silver has reached an oversold 4 hour TSI reading that, in the past, has been very close to a bottom in price. The 1 hour has already made a positive divergence suggesting that downward momentum is faltering.

    If this price movement is indeed options expiration related I guess the goal is to scare as many people out of their long positions as possible by hitting stops and covering short positions. And if this is the case this should be a one day event....not a new downward price trend.

    We'll see.

  4. thank you for the update John...this action is sure making me looking toppy as well

  5. LOL - it's supposed to make you nervous. That is exactly what the short folks want.

    Anyway, we've gotten the break down in the dollar I was looking for and gold and silver are trying to break up through their TSI 60 min chart overhead resistance trend line.

    Sometimes it takes nerves of steel to stay in this game and win. Sometimes I think it is better to just turn off the computer and do something else - because the wiggles and squiggles can drive one nuts.

  6. a few posts ago we were predicting gold to 1650 by end of April/beginning of May

    we're def. running out of there an alternate scenario?

    HUI can't even make it past 580, let alone the old highs

    unless this rally starts this week and we close over 1450, we need to look at alternate counts/scenarios

    any thoughts?

  7. Gold Will hit daily bottom Tomorrow or 30th.

  8. Anon - you ask some very good questions. I have not seen enough yet to convince me the scenario is out of the game.....for now I am just waiting to see how this week ends, to be honest. Will the US Dollar finish with a weekly swing low? Will gold finish with a weekly swing high? I don't know.

  9. John,
    as I've told you way to many times its all about manipulation of these markets.If gold and silver were allowed to trade free both would be at the high you suggested and probably a lot higher .
    Like you said its expirations week-there hasn't been one yet that the crooks haven't come in and tried to bring them down .
    i would guess next week things might start to look and act normal again .
    Consider: if you had, four months ago, been told that in the next four months the dollar would drop substantially, we'd see the Japanese nation and economy hit with earthquake, tsunami and nuclear devastation, falling PIIGS governments, turmoil and war in the Middle east, what would everyone have thought? That Gold would be where it's at now (not a lot higher than 4-5 months ago), or skyrocketing /
    I just call it as i see it--manipulation

  10. the dollar doesn't turn broke the declining trendline - bullish

    gold hanging by the wire - it's been down 4 straight days - bearish

    I'm going to stay out until gold closes above 1450

    the number one rule about trading is preservation of capital

    good luck everyone..

    John, please let us know if you're seeing anything different

  11. John,

    What is your take now on the C-wave-reaching its peak by early May ?-Looks a little weak at this point, might have to wait a little longer.If the Fed stops QE ( which i doubt )as you say we will drop like the Titanic .

  12. Robert, for now I think the C-wave is alive and well. We are no where near reaching the uptrend line of the past 2.5 years. If Korea could drop the dollar like it did last Friday with just $6B, just think what Japan and China could do.