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Jeff Pierce
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I’m a swing trader of momentum stocks with a holding period of anywhere from a few hours to a few months. I run a number of screens to locate the strongest/weakest stocks out there, using technical analysis to determine my entries and exits. Trying to calculate the intrinsic value of stocks in... More
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tradewithZEN
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  • US Dollar Attempting To Form Bottom 0 comments
    Oct 6, 2012 12:02 PM | about stocks: UUP, SPXA, UDN

    By Financial Tap

    The following is a brief excerpt from the premium mid week update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors. They offer a FREE 15-day trial where you can experience their proprietary cycle research, weekly updates, and real time alerts. 15% off with coupon code: ZEN

    $US DOLLAR - Cycle Counts

     

     

    Cycle

    Count

    Observation

    Outlook

    Cycle Clarity

    Daily

    Day 16

    Range 18-22 Days - 1st Daily Cycle

    Bearish

    Green

    InvestorWeek 4Range 18-22 WeeksBullish

    Amber

    3Yr

    Month 17

    Range 36-42 - 3rd Investor Cycle.

    Neutral

    Green

    Secular

     

    The Dollar Secular Cycle is undetermined

    Neutral

    Red

    The Dollar Cycle threw us for a little bit of a loop this week, turning lower from a position where one would normally expect to see continued strength and follow through price action. That's because the reversal on Day 10 signaled willingness from this Cycle to keep pushing higher, all but eliminating the fear of a Failed Daily Cycle. Despite the relatively (for this environment) positive jobs picture (Dollar positive) and reduction in the unemployment rate, the Dollar instead has turned lower and was at one point within just 60 bips of a failed Cycle.

    (click to enlarge)

    So we're left with a little bit of a dilemma here, this Cycle weakness leaves the door (just slightly) open for a marginal Daily and Investor Cycle failure below 78.60. If the Cycle continues to move lower and break previous lows, we might be left with a technical Cycle failure but with bullish diverging indicators. This means that although price could make new lows, the technical indicators could be much more positive compared to the prior low (15 days ago). I certainly cannot rule out the possibility of such an event, but I can almost rule out the possibility of a significant decline below 78.0.

    My primary thesis remains that this is the first Daily Cycle, the previous Cycle Low having met every single requirement for an ICL, so until proven otherwise the call needs to stand. Therefore I will be operating under the premise that this will be a short and weak 1st Daily Cycle. I've been seeing a pattern of short and flat Dollar Cycles recently, and in light of the downward pressure placed by QE, this is not an unreasonable explanation.

    Previous Financial Tap Posts:

    Time To Establish New Gold Positions

    Does QE3 To Infinity = Next Leg Up?

    Themes: market cycles Stocks: UUP, SPXA, UDN
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