The MasterCharts: February 2017
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Note: Green is today (or last trading day)


Wednesday, February 22, 2017

#USD Dollar Index - Waiting for the upside breakout

Attachment 1 is the U. S. Dollar Index long term Point&Figure chart. For the last 2 years the index has been forming a Broadening or Megaphone pattern. A breakout of 102 would signal that the index would be departing for a new uptrend.

The U.S. Dollar Index, which reflects a basket of currencies versus the U. S. Dollar, has shown some strength lately. Attachment 2 indicates the components of the U.S. Dollar Index. This is the index the Federal Reserve is watching.


The reason is once again the financial condition of Greece. As in the past a lot of talking is taking place among Brussel's politicians (EU), the International Monetary Fund (IMF) and the Government of Greece.


Most likely, nobody in the European Union has an interest to deal with the real financial crisis (haircut on government bonds, let Greece out of the EU in order to devalue the new currency) as the elections in France are just two months away. Some new funds will flow to Greece to calm down the game. In other words the problem will be postponed to an indefinite date.


Attachment 3 shows the EURO versus U. S. Dollar

long term Point&Figure chart. It indicates the dramatic decline of the EURO in spring 2014 from 136 to 105 in spring 2015. We are bullish on the U. S. Dollar and wouldn't be surprised to see the next downtrend to be started in the next few months.


Wednesday, February 01, 2017

Key Technical Levels on #Gold, #USD Ahead of #FOMC Rate Decision

From Paradigm Capital:

Chart 1 – Key levels to watch on Gold heading into the FOMC Rate Decision on Wednesday:

o   Support at the 50-day moving average near $1,180, a breakdown would signal the resumption of the downtrend with risk to the December lows;

o   Resistance at the January highs, ability to make a higher high would signal upside back toward the 200-day MA near $1,270.

Chart 2 – The key ratio we continue to monitor for a directional signal in gold equities is the GDX versus GLD. Recall that a key a staple of a gold bull market is outperformance of gold stocks relative to gold. Ability for the GDX:GLD ratio to break above 0.21x along the November and January highs would, in our view, provide a signal to build an overweight gold position. Failure at this level, however, would keep the series of lower lows and lower highs intact.


Chart 3 – The U.S. Dollar Index has pulled back to support along the December lows. A break below this level would sgnal a deeper correction back toward the 200-day moving average. Resistance on the upside exists at the 50-day moving average at 101.50.
Gold: Key Levels Ahead of Fed
GDX vs GLD Ratio: Watch for a  Break Above November and January Highs
U.S. Dollar Index: Key Levels