Dollar Index Update

Dollar has busted out of a small wedge but is up against a couple more resistance lines at or near either a .500 (third pic.) or 1.00 node (fourth pic.). Could stall or reverse right here. The first image is hardest to reconcile with the others, but it is the shortest time scale pictured. Regular chart, breakout is the little curl to the upper right, the wedge can also be seen, but it looks elongated within the narrowing Bollinger Bands.

With Housing going soft, these charts say Lumber production should start to fall immanently. Yes, these maths will work on production output data, not just prices!

Note the nodes now being reached, .500 on earlier format (with a trendline crossover, another indication of change, lower chart), and on a different study, -1.0 on the newer format (upper chart). The reason this works for production data, is because raising or lowering production is an economic decision, not unlike buying or selling a security.

All previous trendlines on recent charts for precious metals, and the $SPX are holding. That is, using XAU as my PM index, that bottom is holding and the top long term trendline on the $SPX is still capping any further advance.

If anyone has an interest in an analysis, point me to a dataset, and I'll consider doing it. Most of the markets haven't progressed enough in any specic direction to make recharting them worthwhile at this time.

Market action for the last few days has been somewhat ambiguous. Certainly the powers that be are trying to keep the markets up, even as they bring societies down. Surprising that they can't understand that you really can't get away with that.

Here's what stopped the waterfall decline in August. This supporting trendine will need to be breached for a bear market to truly begin.

The important dates that mathematically created this trendline are: 10/10/02 (major bottom) 3/5/04 (intermediate top) 10/11/07 (major top) Closer view:

Hyperinflation? Not likely.

You know, one thing I think won’t happen, is ‘all of those printed dollars coming back home’. Right now there are oversupplies of just about everything, and that will get worse in the coming months. The real crisis is about central banks creating artificial demand for several decades because the underlying technological paradigm has been rendering workers increasingly redundant. So you create bubbles in stocks or real estate to provide some additional economic activity. Or, bubbles in subprime, nonperforming car loans or subprime nonperforming educations. End result, we now have way to much real estate, too many cars, too many grads, too much junk bought on credit. What we don’t have, is a way to allocate consumption, as the link between REAL jobs and consumption is broken. People consume because the government is trying to keep all of those supply chains working, so they print or borrow capital to hand to the people in order to keep the delicate and complex production machinery working, which has nothing to do with keeping people alive, that’s just a (politically expedient) byproduct. Now that the true deflationary impact of technology can no longer be held back, those supply chains are indeed starting to crack. First goes the retailers, like Macy’s, Sears, etc. and even, yes, McDonalds. We are seeing it also at the other end of the manufacturing sequence, way upstream, in the collapse of mining, coal, oil, industrial metals, lumber. In between, manufacturers are feeling it too, Catapillar, being a bell whether stock, is going down. The whole industrial system is ‘deflating’, as aggregate demand collapses. People without real jobs and real incomes, just don’t have the purchasing power to maintain the system’s liquidity and continued operation. The cause, being the curse of manufacturing efficiency with labor disenfranchisement. So, countries that are holding treasuries and want to unload them face the uncomfortable fact that it’s hard to know what piece of real estate, what industrial property, what patent, whatever, will have any ‘income value’ in a structural, global, deflationary collapse. Though the Chinese have already unloaded a bunch of these to buy properties around the world, expect the pace of redemptions to slow dramatically as the outlines of the collapse become clearer. There is a better than even chance that almost all current possible investments from here on out will be under performing or non-performing for years, maybe decades. This means to me, that many of the U.S. Treasuries that are held by nations, at some point will be left unused, or when thought of as ‘money’, left unspent. Many will expire worthless at some point, as no one will have been able to figure out what a real asset was, over the time period they were still viable. That time period being, while the U.S. Government that printed and maintained them, still existed.

Why I created these mathematics, and this blog...

The attempt here is to find relationships, even in manipulated markets, that are so strong and inviolate that even the manipulators can't escape them. My belief is, the longer the pattern persists in time, the more difficult to change it. But that pattern must be embedded, and not in any way obvious. It has to have an unalterable psychological aspect, and be described by discoverable mathematics. This is what I've claimed to have done.

$SPX longterm trendlines holding, another down day today. Tonight's weekly chart doesn't show the new downtrend but next Monday's chart probably will.

Bitcoin's rise is just beginning. But here is why it stalled here, for now. It hit both a node (.75 or -1.0 depending on display choices), and an overhead trendline.

The '1.5' node on one chart and '0.0' node on the other (not shown, graph doesn't go out that far) both represent the same point in time (well into the future), as do the '.75' and '-1.0', where we are now. This rise should get out to a 1.0 or 1.5 node (middle chart) before it's all over and that's pretty far out in time. One caveat though, if governments start abolishing cash, they'll shut this down too. Watch for that, could really end the party early.

Long term trendlines being tested.

I have an e-book out now for Apple and android devices from Smashbooks.

I'm only charging $0.99 for it. Has all the basic equations. It's been out before as a .pdf, the title is: "Elliott Wave Timing Beyond Ordinary Fibonacci Methods". Tried to think of a catchier title, but wanted to describe what it was. Couldn't figure out how to satisfy both needs. :}

Thought I should mention this.

I firmly believe that the charts I provide are for mostly academic interest. Use the information at your own risk. I now think we are in a trading environment where even if you are right, the game is still rigged against you. Wall Street is run by the shrewdest thieves in history, and they will be the undoing of all that is good in the world. So I see my charts as a set of warnings about specific traps, not so much as endorsements for one position or another.