As we head into the New Year I’ve heard one reading on CNBC on Friday that said we are at 63% bulls. That is very high. We now have readings in the most indices that suggest markets are incredibly ripe for a turn. What I’m watching in particular is the XLF which bottomed in August with a low of 13.29 at 133 days. With the same low at 13.29 we are another 132 calendar days off that low on Tuesday. I’m not saying it’s going to validate but it’s at the exact right point in time for an important validation reaction.
If the market can top here, given the fact the inverse relationship with the Greenback is still in force, what is the potential for the Dollar to turn back up? Actually, it’s pretty good. Our Dollar chart this week has a cluster of various channels in different time frames. The bigger declining channel is the bearish channel from last June. The mildly up sloping bull channel is holding the price action right now. To me, this represents the potential of a C wave up in an overall bear market rally. It hasn’t shown that it wants to give us that last leg up but it can’t be ruled out. Finally, the brown line is the channel line on an hourly chart. The bottom line is the pattern came to the lower end of the near term bullish channel, held on Friday and turned up on Sunday night. If we get follow through, all of the calculations I have for a change of direction in the equity market could validate this week. Is this the same old song and dance? It possibly is because we’ve just come out of a 3 month sequence where the market showed nothing but underlying strength in negating every single calculation it has come up against. But markets don’t go on forever and conditions are once again ripe for a turn right here.
Dan Collins and I will have a discussion about price and time squaring at the New York Traders Expo on Presidents Day at the New York Marriott Marquis. Those of you who are new to Gann or have always wondered how to use this seemingly mysterious methodology can’t afford to miss this presentation. You can probably look back on your market career and think of only a handful of presentations that have profoundly affected what you’ve become. This presentation, given that it is likely the only one at the Expo of its kind has that kind of potential to point your game in a new direction.
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Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years.
Lucas Wave International (https://www.lucaswaveinternational.com) provides forecasts of financial markets via the Fibonacci Forecaster and other reports. The company provides coaching/seminars to teach traders around the world about this cutting edge methodology.