US Dollar Finally Hit Bottom?

US Dollar Finally Hit Bottom?

US Dollar Finally Hit Bottom and Gold could be heading lower

The theme from the Gold bug camp for so long has been; Gold is going to soar to the moon.  What many forget is that these fools have been singing this same song for decades. Instead of soaring to the moon,  Gold has been licking the dust for almost 7 years. It topped off in 2011 and since then the action has all down with a few false breakouts that the misguided Gold bugs mistook for the beginning of a new bull run.

We are not against Gold or the precious metals sectors; we actually favour the hard money doctrine, but the problem is that view is not shared by the majority.   Mark Dice illustrated that most individuals would take a candy bar over a 10oz bar of Silver.

Now many would respond by saying these people are stupid, etc.  That’s not the point, the point is that most people no longer view Gold as currency; instead, they view it as some ancient relic.

Is the Dollar getting ready to Rally?

 

Is the Dollar getting ready to Rally?

The bigger issue is that the Dollar appears to be putting in a base. The dollar has mounted a very strong rally since it bottomed out in 2011, so the current consolidation is to be expected.  The dollar is holding firmly at 90; a zone of strong support.  As long as the dollar does not close below 90 on a monthly basis the outlook will remain bullish.  With the passage of the Trump’s Tax package, the outlook for the dollar and the stock market has brightened significantly pushing Gold even deeper into the shadows.  If the Dollar can close above 94.50 on a monthly basis, the groundwork will be laid for a test of the old highs.

Gold, on the other hand, looks like it’s going nowhere

Gold market ready to crash, US Dollar ready to Rally

The dollar topped in early 2017 and did the Gold market respond positively to this event.  The reaction was muted at best. Instead of surging to new highs it could not even trade past its July 2016 highs.  To make matters worse, gold put in a lower high than it did in July of 2016, even though the dollar traded below its 2016 lows.

Other bearish factors

Instead of putting in a series of higher lows, Gold has been putting in a series of low highs since 2013.

It has not managed to trade above $1350 for more than a brief period.  This illustrates that demand is not robust and the market is not pricing in all the negative news.  Until Gold can trade above $1350 on a monthly basis, the outlook will remain Neutral to bearish.

If the US Dollar Finally Hit Bottom, then it should be testing its old highs within 12-15 months

The dollar is oversold and the pattern is still bullish. It has gone through an extensive consolidation phase and it is now trading in the oversold ranges.  A monthly close above 94.50 will solidify the longer-term outlook and indicate that the dollar is ready to test and possible challenge it’s all-time highs.

 

Published courtesy of the Tactical Investor

Originally posted 2017-12-06 15:22:06.

Most Hated Stock Market Bull can’t be stopped by weak economy

Most Hated Stock Market Bull can't be stopped by weak economy

The data below serves as further proof that the economic recovery is nothing but an illusion.  It has only benefited those who don’t really need it. The rich have become even richer, the middle class has vanished and the poor are becoming even poorer.

 

  1. Real incomes have been flat to down slightly for the average household in the bottom 60% since 1980 (while they have been up for the top 40%).
  2. Those in the top 40% now have on average 10 times as much wealth as those in the bottom 60%. That is up from six times as much in 1980.
  3. Only about a third of the bottom 60% saves any of its income (in cash or financial assets).
  4. Only about a third of families in the bottom 60% have retirement savings accounts—e.g., pensions, 401(k)s—which average less than $20,000.
  5. For those in the bottom 60%, premature deaths are up by about 20% since 2000. The biggest contributors to that change are an increase in deaths by drugs/poisoning (up two times since 2000) and an increase in suicides (up over 50% since 2000).
  6. The top 40% spend four times more on education than the bottom 60%.
  7. The average household income for main income earners without a college degree is half that of the average college graduate.
  8. Since 1980, divorce rates have more than doubled among middle-aged whites without college degrees, from 11% to 23%.
  9. The number of prime-age white men without college degrees not in the labor force has increased from 7% to 15% since 1980.  Full Story

What should you do?

Sentiment indicates the masses are not bullish so this market is not ready to crash. Instead of panicking make a list of stocks you would like to own and when the market’s pullback, buy these quality stocks at a huge discount.

Market Sentiment Supports Higher Stock market prices

 

Originally posted 2017-12-06 15:49:39.