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swmnfarmer2878522
Frequent Contributor

The real next big bull market

So many doubters hating on the dollar now.  The dollar does nothing but prove them wrong.  When you put in higher highs it only means there is strength in the market.  Grains are gonna need to take a back seat for awhile.

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7 Replies
swmnfarmer2878522
Frequent Contributor

Re: The real next big bull market

Is it possible the dollar could hit 100 before it over. Of course it can.  You guys don’t believe in lines but looks at the reaction everytime it hits one.  There is a Devine order in everything.

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sdholloway56
Senior Advisor

Re: The real next big bull market

Best count is as a 4th wave ABC flat correction with a slight upward cant.

That would make this the C leg, which ideally should be a 5 wave affair.

The channel topline a bit above 92 looks like a good destination.

Although extreme short positioning in USD makes it vulnerable to more upside.

 

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erikjohnson61y
Advisor

Re: The real next big bull market

Is that why the Dollar has lost 97% of it's purchasing power since FDR first devalued it?  My dad graduated from the University of Minnesota in 1960 with a Masters degree in mechanical engineering, and was hired by Honeywell at a very attractive salary of just under $2000/year. He got married a month later, and a year after that they were able to move out of their rental and buy a modest 3-2 house with detached garage for $6,700. 

Now a crappy little Polaris side by side that won't start in winter retails for $25,000. 

Hyperinflation, when it has happened, has always been preceded by government deficits reaching 20% of GDP.  The CBP projects a FY 2021 federal deficit of $2.3 trillion. But that's before Biden's $1.9 trillion monstrosity that seems destined to pass. If it's all spent, that will mean a $4.2 trillion deficit. Even if GDP reaches $21 trillion in a Covid rebound, that's still 20% of GDP.  Congress is playing with fire, and I bet more than 80% of them have no clue how dangerous this is. Some people actually believe you can create value or wealth simply by putting green ink on a lot of paper. Unbelievable.

sdholloway56
Senior Advisor

Re: The real next big bull market

Long rates and by proxy the dollar can probably go farther than some think, merely because positioning is extreme in the opposite direction and the Fed created that to some degree.

The Fed's current transparent asset purchase program isn't sufficient to stop it, it can just slow it down a little.

At some point they will probably do a "twist"- selling short term holdings to buy long. I don't- and apparently they don't- think it would be wise to make their stand right here. There would be a risk of getting overrun by the market- which would be a much bigger problem. Probably wise to let a little bit of it unwind on its own first.

Neither a 95 DX or a 2%+ 10 yr. will hurt the real economy much, if any, right now. But it would cause some financial ructions, particularly if it happens fast . Also true of 100 and 3%, but with more financial ruction, which they probably really don't want.

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sdholloway56
Senior Advisor

Re: The real next big bull market

If you stick to the e-wave script, this assumed wave 4 correction would need to go somewhere over 94 to overlap with wave 1 and suggest a change in trend.

Although right now I'm having a hard time imagining the likely fundamentals that would power a wave 5 down.

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sdholloway56
Senior Advisor

Re: The real next big bull market

BTW, nice call.

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swmnfarmer2878522
Frequent Contributor

Re: The real next big bull market

The moon shines on a dogs butt once in awhile 

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