Phantasmix Stock Blog

Ha, I use 2 different variations of my first name. Depending on that my name anagram comes to BLUNTER SHOVE or NERVOUSLY BEAT. The first one is a disturbingly accurate description of (some of) my traits.

U.S. Dollar

(see, pretty blunt)

Very short term but still, possible falling wedge — a bullish reversal pattern — is developing on the U.S. dollar chart. Imo dollar going up won’t necessarily hurt gold because in the last couple of weeks both gold and the dollar were advancing at the same time, at least a few times.

Click to enlarge

(GLD: 114.288 +0.45%), SPDR Gold Trust ETF

2-year daily chart of GLD, gold ETF.

• Inverse head and shoulders (bullish pattern)
• Also bullish is the symmetrical triangle, really looks a bit like an ascending triangle, which is a continuation pattern

Since these are fairly long-term patterns (not a month or two), I think they are more reliable.

Gold should break out soon.

US Dollar Index

I looked at this chart on June 22nd. I wasn’t sure if the pattern that was building was bullish or bearish. It didn’t exactly break out, there’s now an extension to that ‘whatever-it-was’.

And I’m now leaning towards it being a bull flag (= falling wedge).

Dollar daily cycle low is due any day now. Today is day 20 of the daily cycle that usually lasts between 18-28 days according to The Smart Money Tracker.

If current dollar-market relationship doesn’t change, then U.S. dollar going up would be bearish for the market.

Damned if you save, damned if you don’t…

Source: Times Online

Japan Considering Taxing Cash; “Nominal Rates of -4% Might be Closer to What is Required to Rescue the Economy from Another Deflationary Spiral”

Unorthodox, untried and, said one Bank of Tokyo Mitsubishi strategist, “in the realms of economic science fiction”, the recommendation has nevertheless begun floating around Tokyo’s corridors of power and economists have described Japan as particularly suitable as a testing ground.

I don’t know why they say it’s unorthodox and never tried before. Sweden has done it before, albeit in a slightly different form.

Edited to add: “Apart from France, within Europe, Greece, Norway, Switzerland, the Netherlands and Liechtenstein impose a wealth tax, although often with lower rates and higher thresholds of imposition than in France “

I’m not sure if this is a bear flag (chart 1) or an ascending triangle (chart 2). Will the dollar go up or down in the next month or so? Can’t really be the triangle because normally it’s a continuation pattern, that is if the dollar was going up before the triangle formed, then it would be a valid ascending triangle.

So I guess a bear flag – or a rising wedge – it is.

Regardless of the type (reversal or continuation), rising wedges are bearish.

$USD down = stock market up.