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December 09, 2008

Uncle Buck - In for a checkup
by Gary Tanashian

Uncle Buck looks sickly from these panic fueled levels. The debt note that was the dirty little secret (along with pal Johnny Yen) of an entire global financial apparatus pretending that the 2003-2007 bull market was real (and pretending to know what it was doing with other peoples' money) is now showing exhaustion.

This is just a routine (daily) checkup on the USD. We will evaluate upside or downside potentials after the Dollar breaks the Head and Shoulders neck line shown on the chart and approaches the initial target at the 38% Fib retrace.

Upside momentum has been waning for some time now and as MACD triggered down and was confirmed by the slower TRIX indicator, it became apparent that at a very minimum the Dollar was losing steam and markets, which feasted off of Dollar weakness and got decimated due to its impulsive strength, would catch a breather.

But what remains critical is the look of the topping pattern in USD and corresponding bottoming patterns in most markets. We have been watching these patterns in Notes From the Rabbit Hole (NFTRH) and following money supply and other non-USD supportive data in support of a bullish gold miner and decidedly UN-bearish stock market stance.

Simply put, the Dollar benefited from a global panic back to prudence. This deleveraging may not over, but the time is right for an extended rally and return of hope to global casino patrons. As the rally gets long in the tooth perhaps in a few months, it will be time to evaluate the Dollar's fate from that point. Remember, its paper competition is just a lesser version of intrinsically valueless.

Gary Tanashian
http://www.biiwii.com/

Disclaimer: biiwii.com does not recommend that any trading or investment positions be taken based on views expressed on this site. If you speculate or invest it is suggested that you consult a financial advisor qualified in your area of interest.

Copyright © 2005-2009 Gary Tanashian

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