Saturday, April 23, 2011

The Dollar will not die (yet)

This is how a typical Capitulation looks like! The rats are jumping ship and the Sentiment becomes lopsided.

Technically this looks like a great set up for a monster short squeeze. Maybe we will only get that , a squeeze, a good run to 81 or 88/9 before the end will come and we will enter the 60ties .....
I'm not religious about that, but what I do know is that given the structure in SILVER, OIL, GOLD that a minor US$ squeeze could trigger some serious correction.

We ran 2 different independent TimeCycles models ( which show that we dealing here with probabilities ONLY, just some indicator that is supposed to beat the rolling of a dice...) and both seem to hint at the possibility of a turning point coming.

The key message today is that all markets are completely aligned with the Dollar like Equities, Commodities etc. The degree of positive correlation is a systematic sign of the lack of REAL liquidity in the Market. When this Market dives there will be NO diversification, just a black hole. This is the biggest fear of the Centralbanks and this is the reason why they fight the tide. The only problem the have is that the more speculative the market became the stronger the tide turned they try to hold back.

It's a ponzi house of cards on steriods which will crumble by its own weight when the day arrives, which could be next week .....

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