I think everyone would appreciate how much I enjoyed plotting this point figure chart of the US dollar. Already it is almost back to its first downside target. I think it will find some support in the range of 104 to 105 area.
But if you thought that chart looked dramatic – just look what the Swissy has done against the US dollar. I saw something about it being the steepest move in the dollar in eleven years and by the look of this chart, it might well be the case. Amazing though isn’t it – after all these weeks when I have been frustrated by the blessed dollar – it goes and does this in two days.
Commodities joined in the fun again this week. Oil was a bit of a laggard but there were some good moves with nickel a bit of a feature again. Precious metals were better and once more to show the picture here I am doubling back to the DUST chart – remember two times bearish and invert it for the trend of gold. I mentioned a couple of weeks ago that this was looking like a big top. Once it ran out of steam it absolutely collapsed back to its first target and the support in this area. As I am always looking for the negatives as well as the positives, we need to watch this one. Might want to bounce here.
Unfortunately, the bond market was closed on Friday so no update on rates but I would assume they would have closed lower along with their partners in crime.
And then the Dow. Last week I mentioned that the cash level on the sidelines were the highest since March 2020 and then I saw this headline –
“Dow finishes up 1,200 points as stocks post best day since 2020”.
Obviously, everyone was in a hurry to spend their money.
This week I am including the weekly chart of the Dow. Note how it has just nudged out of the downtrend formed over the past eighteen months. There is going to be a lot of overhead resistance up here so it will be tough going but we have to be impressed with progress so far. But always remember – nothing goes in a straight line – except the dollar over the past couple of days!
One thing that I thought was interesting was a better picture coming out of Asia. Hong Kong particularly took my eye. Look how it has bounced since the sell-off a few weeks ago. Shanghai looking better and so is Taiwan. Is the market starting to think that discussions between the US and China might make some positive headway?? Just something to watch for. Japan and India look like they want to break topside.
And look what the Dax has done. Broken its downtrend. Here again a lot of overhead resistance but one can’t help asking – energy crisis – what energy crisis? Six consecutive positive weeks – due for a correction.
And for a bit of light heartedness, I am again including the chart of BITO. I mentioned during the week, that I really had vowed not to put any more extensions on the bottom of this chart, but I relented as the recent news hit confidence here. It came on the market around $44. Now under ten. Not a bad investment!!!
Back in Australia, we had my favourite people once more trying to prove that black is white. Took this bit from the newspaper:
“Bullock said the RBA was caught off guard by how high inflation went and had to raise interest rates in response.”
Caught off guard by how high inflation went! If a Simple Little Chartist could make “inflation” the word for 2021 – not 2022 – then what the hell were all these highly paid boffins doing with their time. All history now of course but I still find it all very annoying. My TV is at great risk of serious damage every time they make the news!!
Our market had a good week with our XJO racing through to the next resistance line with nary a worry. XGD also had a good week with the improvement in precious metals but….it is starting to get up into overbought territory, so I do have to suggest a little bit of care here.
(20min delay)