Let’s look at the weekly charts for US 10Yr TNotes, Gold, S&P500, EUR, USD & Yen to find out if the US stock market will soon have a big fall!
The S&P which is a snapshot of the US Equity markets is at its highest.
Store of value assets like gold and bonds have been ranging for over a year indicating that a breakout is imminent, while USDCHF and EURUSD have reverted to their two year mean and can gain momentum in any direction now.
From a global macro perspective all looks set for the collapse of the US Equity market and the US dollar. If this happens, bonds and gold are cheap enough to be a good safe haven.
Of course these trades are technically sound, but we need a fundamental reason to trigger the sell off of the USD.
Lets see what happens.
IF the dollar should crash now, it may crash all the way to the middle of next year and beyond.
Lets see how all this plays out.
Please note though that USDJPY has been ranging since the start of this year, against the strong uptend we saw last year. This long range may be dealers trying to hedge counterparty risk for the fall of the dollar. USDJPY is pushing up but we know that the big boys push price up to create a bulltrap for bullish breakout traders, only to suck price back down.
Lets see…will the crash of the US stock market and consequently the USD start sooner than we think?
If yes, then this will be a fantastic trade to last for months, maybe even a year or more!
Yours in the quest for consistently profitable trading!
Olufukeji Adegbeye, CWM