Wednesday Dollar Rally Update and Entertainment

Based on our best internal measurements, the dollar rally probably has a day or two left in it at most.  Though it didn't feel like a rally today, the dollar rose during US market trading hours after pulling back overnight.

From a daily cycle point of view, the euro has completed a 50% retracement from its August 24 lows and the dominant daily cycle has turned positive.  The USDX chart shows a similar cyclical downturn.  Unless the cycles invert, we're near the end of the up move for the dollar--at this stage, we're simply waiting on a confirmation.

Gold appears to have broken out of its trending move and appears due for further downside and a few weeks of consolidation.  We believe that the dollar/gold correlation will break down for 5-7 trading days as gold continues to move down toward 1280 and begins a consolidation process.  We may have a day or two of bounce as gold moves off of its 50 dma, but we're still under the belief that the downside move is not yet over.

Tonight's entertainment is not "family friendly," but is entertaining nonetheless.  It is a sarcastic, crude parody of Vince (of "SlapChop" and "Sham-WOW" infomercial fame) pimping a scanner for TSA to make people fill better about their naked scans.  Very entertaining.



P.S. The newsletter is still coming!  We're behind on getting everything done, but it will be out soon!  If you haven't signed up for it, you won't want to miss it!