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Dollarmilkshake

Eurodollar, Negative Interest Rates, and the S&P (Post 8ish)Twice since 2000 the eurodollar future as pumped to near 100 and at both times the midpoint consolidation marked a bull trap within the S&P. Our current set of circumstances is unique as a third touch at resistance puts the eurodollar future above 100, which signals negative interest rates in the real world and outside the control of the Federal Reserve. How the Fed will respond to this remains to be seen. How market will respond to this remains to be seen. There are several countries with interest rates ranging from -0.1 to -0.75 and if the Eurodollar goes above 100 we should see a whole lot more. www.investopedia.com The chart below zooms in on the eurodollar and SPX. The eurodollar and SPX both hit a local low at the same time and the Eurodollar shows a textbook BARR bottom. It is clear that the flagpole bewteen consolidation 1 and 2 was timed with the dump in SPX. Consolidation 2 overlaps what I believe to be a bear trap in the eurodollar. Another flag pole should throw SPX price action to the ground. thepatternsite.com Here is a side by side view on the eurodollar and S&P. As I have recently been mentioning elsewhere I am using the Volatility Stop to try and help be refine the timing of my entries and steadying my hands to help me let my winners run when they are in a consolidation pattern and I start to doubt my big picture. The chart has a lot of sound theory, SPX support flipping to resistance, a indicator suggesting trend reversal on SPX, a micro acceding triangle in the Eurodollar chart and a stop loss all in one. If we see the SPX price action reverse and close a candle body above 3166 the trade is over or on hold. If the eurodollar dumps as the acceding triangle fails to to perform the trade is canceled or on hold. Here is another look at an asset that had a BARR bottom and hit full flag pole performance after Consolidation 2. There are a lot of differences between the eurodollar and bitcoin and the main one would be the macro-structure both are in. Key would be bitcoin hitting a lower high on this BARR bottom but I am calling for a higher high on the eurodollar. Clear performance should only be a week or two away. Really close. Of course, I am not a financial advisor, nor am I a certified market technician. Take a look at my linked post, you will see me being right on a lot of theory, but you will also see me getting the timing wrong quite a bit. There was still a lot of money to be made on the swing trades, but I was looking for that big move that I think is coming shortly. I still see this as a subvert currency war against China due to their eurodollar exposure and how the US has been probably using the Dollar Milkshake Theory to influence the dollar shortage so it will be interesting to see how this plays out, especially in the Chinese market.
GShort
by This_Guhy
2
DXY - US Dollar Macro OutlookWelcome to my series of macro outlooks where I put together threads focused on long term perspectives for major asset classes. My goal is to provide you with a long term view that I update on a monthly and sometimes weekly basis so that you can have the means to make wise and calculated trades in the shorter term. I have threads for assets that are typically viewed by investors and traders as market leaders. Having an idea where the market leaders are heading will give you a compass to make decisions in smaller cap assets that tend to follow. I will do my best to keep these threads purely technical in nature. The Dollar Milkshake Theory The dollar milkshake theory, coined by Brent Johnson, is the theory that before any type of hyperinflation occurs, countries must pay off their debts. Since the dollar has historically been the global reserve currency, the majority of debt is held in US dollars. As we enter the stage of retracting economies and deflation, liquidity will get sucked into the dollar. The Petro Dollar The US dollar has been the standard for oil trading. From 1971 to present day, if you want to buy oil, you need dollars to do so. Countries have been trying to get around this. We have seen countries like China swapping oil for gold and other savvy moves. This hasn't become the dominant way of trade to avoid a type of war, I'm assuming. The Forex Markets The forex markets are pairs of national currencies trading back and forth. Each currency "price" reflects the strength of that country's economy against the countries currency it is measured against. The $DXY for example reflects the US dollar against a basket of currencies such as the Euro, Pound, Swiss Franc, Etc. Understanding the forex market, specifically the DXY will give you a snapshot of what the country's economic condition is in. Enjoy!
TVC:DXY
by micahjmiller
3