I have been watching this wedge on the True Strength Index (TSI) indicator developing for a couple of months now - wondering, of course, how it would turn out. This morning I got my answer. Not good for the US Dollar, but very good for gold and silver.
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Meanwhile, gold is awake and responding. The suggested trend line break on the TSI that would trigger a sell signal is no where near the current TSI reading. It looks like this situation could take several weeks to conclude with a sell signal.
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So the bearish wedge on the U.S. dollar looks clear as day to me. You can clearly see the lower highs made by the dollar and then, BOOM! Breaks through the wedge to the downside. 72 is the next support level.
ReplyDeleteWow, I didn't know you could apply a wedge pattern to the TSI indicator, interesting!
ReplyDeleteBye bye dollar =)
Those expanding bollinger bands on gold look very bullish too!
Awesome post John, informative and interesting as always.
Spidey - I often think it is clearer to understand what is going on not by watching price, but by watching the TSI. In this case, both price and TSI 'broke out' at the same time. OK. But there are other times that the TSI tells you, in advance, what will likely happen with price next. And this fascinates me each and every day.
ReplyDeleteYou've done well lately John, with your predictions on the dollar and the metals. I believe you see the trends continuing until early summer and then a change, is that right? Perhaps you would be so kind as to give a recap of your views of what may lie ahead? Gracias. Carl
ReplyDeletePerhaps this trend will continue for sometime, Indeed a very informative post.
ReplyDeleteCarl - well, I will go as far as to say I don't think the party is over yet. It could well come to a brief halt this week as the gold daily cycle has about run out of days and the US Dollar is so oversold that it is due a bounce. Assuming the dollar turns over quickly thereafter, we should be heading up the home stretch.
ReplyDeleteHi! A propos comparing to 2006 and -08, here is the 4 hour candlestick chart for April 2006 compared to today. You'll see that both started to correct 11 April. But 11 Apr 2006 lasted only a few chandlestics.
ReplyDeleteThe grey arrows points to where we are just today compared to same on 2006. And check the similarities of the patterns incircled. The upper left (april 2011) should even be scrinked 30% to attain the same scale, and then it is even more similar.
Maybe we'll get the first?)parabolic in a few days just as of April 2006?
http://www.flickr.com/photos/58720171@N08/5612194347/sizes/l/in/photostream/
John, not to rain on the parade, but seems silver (slv) daily has a tsi sell signal. Waiting for nearing to zero or tsi trend break in 3-5 days. Who knows? Maybe get it.
ReplyDeletetrond56 - I took a fast look at your excellent chart. Thank you for sharing that! Overnight the silver futures have retraced higher 50% of yesterdays move down. Volume yesterday was scary high. From your chart I am guessing that silver needs to hold yesterday's low for the comparison to hold water (which would be great, if true). Any other thoughts?
ReplyDelete