John, you will recall our little wager of a month or so ago. Your bet, gold would run and the dollar fall. My theory, the opposite. Well, we know how that has panned our. The markets gave me a “bitch slap.”
I wanted to give you an update. The reason I was confident in conceding defeat with plenty of time to spare is that charting is a large part of my methodology, and when both asset groups broke my resistance levels, I knew we had further to go.
The larger and more important resistance lever for me (though at the time I was not sure we would get there) is the 74.45 level in the DXY (US dollar index future). The DXY hit 74.445 early this morning on a fairly sharp five wave move down. It immediately bounced off of this point. The coming days should be interesting. If this line holds and the dollar begins to rally, would most likely prove to be the lynch pin that reverses gold and the equities markets.
If not, well it won’t be the first time I was wrong.
Just wanted to give you a heads up and something to observe for a few days.