Posts by "dhussey"

If you have followed Ashraf Laidi or I on twitter, you may have noticed we have briefly discussed the $DIXI & $USD/CAD & $VIX correlations (or lack there of). From at least the start of 2010 (thats when I started following the $/CAD and VIX correlation) the $USD/CAD and the $VIX have been trading hand in hand... From about 7/16 through today the two have diverged (slightly) from each other... Remarkably the $AUD/USD and the $AUD/JPY showed the same divergence starting mid July as well. To me, when I compare that with my $EUR/USD and $DIXI analysis- I notice that this divergence is entirely $USD related- as the $DIXI began its latest leg lower to the current lows in mid-july.

This serves as some more proof for the $USD divergence from its safe haven status that Ashraf referred to in his latest ITM, the only question that remains is how long this divergence will last (the divergence in terms of RISK: the USD BUYING being associate with RISK ASSET SELLING).

I turned to the $DIXI (I chart the $DIXI futures btw, SEP contract now) and it appears it has taken its first run at the 50% of the move from 74ish to 88.9ish (daily chart)... The $DIXI has been selling off in a well defined corrective channel, and support has held at the 81.55 (50%) level, which the next major support NOT far below 79.80 (61.8%)... The 200 day SMA is also converging with PX - and sits at 80.845... I am sure you get the picture I am painting, but I believe the $USD is showing its first signs of bottoming out- or at least is showing a bullish divergence on my oscillator (4 and 1 hour) in conjunction with some pretty big support levels...

I would imagine, a solid hold of support for the $DIXI at these levels would re-energize $USD bulls a bit, and open the door to the test of the 90 level, where it failed at previously, and is also the 2009 high. A test of the 90 handle, IMO is going to be one of the BIGGEST events for the $USD for a while, a break higher would be almost unreal in this market, but never-the-less could very well be on the table soon enough.

SO- to wrap this up IF / WHEN the $DIXI finds support, and IF that is in the VERY near future, I am looking for $AUD/USD to play catchup with $AUD/JPY and the $USD/CAD to play catchup with the $VIX... (and if today was the $DIXI bottom) I am looking for $AUD/USD to break its .89 and head to at least .87 support in near term... And $USD/CAD to explode past its 1.04 resistance and more-then-likely then call up the 1.05 and 1.06 handles rather quickly...

OF COURSE this ALL relies on THE AUD/JPY (all JPY x's for that matter) and Equities (Specifically SPX) to continue lower, making lower lows and lower highs... So that RISK continues to sell off / be taken off...

-Dan

My previous post regarding aud/ jpy seems to have played out- aud/usd went a bit higher- but risk looks to be heading lower regardless.

This triangle in AUD/JPY is a HUGE indicator that RISK is likely nearing its termination. I am looking for a break higher, likely to the 80 level then LOOK OUT BELOW! This will likely correlate with a terminal push in the SPX to fail at or around 1125-1130 fib level, and AUD/USD to .8730-.8750.

When AUD/JPY SOLIDLY breaks the 78 figure, I am HIGHLY certain risk will be heading to new lows across the board.

I see AUD/USD capped at .8730-.8750 and if EVER the AUD/JPY breaks out of its triangle, SELL that rally higher, it should be terminal.

Risk is putting in terminal patterns across the board and I fully expect there to be some big moves lower in equities and risk :)

-Dan

Anyone have thoughts on Gold?

I Just got short myself, and I am quiet bearish, targeting sub 1100... That being said, from an Elliot Wave perspective, Gold looks to be putting in an ending diagonal into the 1183 ish resistance. There is a FIB level right there as well... I see Gold finishing a B wave correction with an anticipated 5 wave impulsive C wave lower... I have been baffled by Gold alltogether, as I don't find the value in it others do... If you can't use a commodity in production, what good is it? (just making a point here, I do understand Golds inflationary hedge position, as well as a safe haven...)

I am also bearish in US equities. The SPX may have one more push to 1226-1230, but otherwise I see a major failure looming, and at least a test down to sub 1160. Pretty clear 5 wave up off 666 low... I have to now anticipate a decent wave 2 or B correction...

Ashraf- you have mentioned previously that equity selloffs
can nudge a selloff in Gold as well- I would love to hear your perspective on US equities and Gold!