A Dollar Bottom Has Not Been Confirmed

8/14/2019 A Dollar Bottom Has Not Been Confirmed

1/5

Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine

covers over 5,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stockpicks, and commentary can be found HERE.

Suttmeier's Four in Four video can be watched on the web HERE.

November 23, 2009 A Dollar Bottom Has Not Been Confirmed

US Treasury yields face $118 billion supply test. All time high for gold, while copper andcrude oil remain above 200-week simple moving averages. A dollar bottom not yetconfirmed, as the euro appears tapped out. Stocks are rolling over from the SOX to theDow.

The US Treasury sells $118 billion in new 2-Year, 5-Year and 7-Year Notes this week.

On Monday $44 billion of 2-Year notes are auctioned with a weekly pivot at 0.74%. On Tuesday$42 billion of 5-Year notes are auctioned with a weekly pivot at 2.20%. On Wednesday $32billion of 7-Year notes are auctioned with a weekly pivot at 2.93%.

The daily chart for the 10-Year note shows the yield between its 50-day and 21-day simplemoving averages at 3.39 and 3.44, and the 200-day at 3.29. This seems like the balancebetween risk aversion and supply concerns.

This yield has been above the 200-day since mid-May, as a sign that supply concerns hasbeen winning the tug of war versus risk aversion. Charts courtesy of Thomson / Reuters


2/5

Gold is trading as currency of last resort and as a risk aversion asset.

The weekly chart shows gold beginning its parabolic bubble phase thanks to Fed policy. Gold

set another all time high this morning at $1,167.1 approaching weekly resistance at $1,170.

Investors turn to gold because of their concerns about the weak dollar. Gold can be considereda risk aversion hedge against inflation or deflation, as both have become global concerns.

Copper reached a new high for the move at 317.90 this morning and is above its 200-weeksimple moving average at 295.46. If this weeks pivot at 315.94 fails to hold, the global growthstory weakens.

Crude oil ended last week above its 200-week simple moving average at $75.59, but not thenegative divergence in MOJO, as oil remains below its October high of $82.


3/5

In mid-2008 the theme was we need more refinery capacity. Today refineries are beingclosed. The weakening economy has reduced demand for gasoline, as commodity speculationkeeps oil too high.

The dollar index did not end last week with a Weekly Key Reversal.

The dollar index remains above the trend line going back to April / July 2008 with this supportat $74.59 this week. The dollar remains extremely oversold, and a close this week above thefive-week modified moving average at $76.03 shifts the weekly chart profile to positive at theend of Thanksgiving week.

The euro is overbought on its weekly chart but with a negative divergence in MOJO. Note thatthe euro has not been above to sustain gains above 1.50 over the past five weeks. A close thisweek below the five-week modified moving average at 1.4773 shifts the weekly chart for the

euro to negative.

The Philadelphia Semiconductor Index (SOX) has been the topping out leading indicatorfor stocks.


4/5

The weekly chart for the SOX is negative with declining MOJO. The double-top is at 337 set inSeptember and October. This was a test of my semiannual resistance. The weekly chart staysnegative on a close this week below the five-week modified moving average at 310.34.

Moving up the ladder of less-bad topping out patterns are the Russell 2000, Transports,NASDAQ and the S&P 500. The Dow remains positive but overbought as the top relativeperformer.

The weekly chart for the Dow stays positive but overbought on a close this week above its five-

week modified moving average at 9,956. Ascending wedge resistance is 10,520 with the downtrend at 10,612.


5/5

Send me your comments and questions to [email protected]. For more information onour products and services visit www.ValuEngine.com

Thats todays Four in Four. Have a great day.

Check out Forex TVs Markets Review, which is also available HERE.

Richard SuttmeierChief Market Strategistwww.ValuEngine.com(800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the websitewww.ValuEngine.com. I have daily, weekly, monthly, and quarterly newsletters available that track a variety of

equity and other data parameters as well as my most up-to-date analysis of world markets. My newest productsinclude a weekly ETF newsletter as well as the ValuTrader Model Portfolio newsletter. I hope that you will go towww.ValuEngine.com and review some of the sample issues of my research.

I Hold No Positions in the Stocks I Cover.

Documents

A Dollar Bottom Has Not Been Confirmed