Boy do I love Switzerland and their currency at the moment! The chart above presents my phasing analysis on the USDCHF currency pair (inverse of the Swiss Francs Futures). The chart has never been more clear than this current point in time. As visible above I am significantly bearish on the prices of the USD against the Swiss Franc. In fact, I am even bearish on the EUR against the CHF. I believe that the CHF is likely to be one of the better currencies in the upcoming environment. I have spoke many a times about longing the CHF against currencies like the JPY considering my bearish outlook on the JPY pairs and that trade has been fruitful for many of my subscribers. I still hold a bearish stance on this currency pair (USDCHF) since the market has not presented me with data to alter my opinion. This market is on the verge of plummeting in a fashion not seen since the outset of currency trading. The most similar cyclical circumstance is a little prior to the beginning of this chart under which, considering the phasing presented above, the CHF was at a better position than the USD and this currency pair, if traded, would have probably been declining.
The chart above presents my projection on the prices of USDCHF as well as my detrended projection of the RSI. Soon we will add a projection of volatility into the software as well as a some second derivative of price. This certainly looks bleak for the future of the USD, fantastic in terms of commodities and certainly disruptive in terms of global equities! Many people state that we have not yet reached the exponential phase of US equities yet and considering the positive correlation between the US equity market and the US dollar the US dollar is likely to shoot through the roof in a similar fashion as equities should in the near environment. Let me present you with a chart of equities from the 2009 low.
The three phases of Charles H. Dow (R.I.P) have never been more clear and apparent to any technician engaged in the markets. It is as clear as the sky in July that this market is on the verge of tanking in the near future and hence that should be generally negative for the prices of the USD going forward. I have recently heard that more brokerage accounts have been opening up than closing for the first time since the dot com bubble. It is strange to me that many analysts are using this as a bullish sign for the market rather than a bearish one. The professionals need people to take on their positions which they know will soon be worthless and hence the effort in advertising the recent gains in the equity markets have been huge in order to drag “get rich quick” dreamers into buying up stock at ridiculously high prices from the professionals who have been in since early 2009.
The 18 month FLD on the USDCHF has been taken out confirming a peak of the recent 18 month wave. Bear in mind that the 18 month trough is not expecting for quite a awhile and hence the potential for this market to drop significantly lower is huge. All the reasons cited above favor a bearish dollar going forward. Please don’t get suckered into the hype around the dollar and equities or even Bitcoin for that matter they are all on the verge of a collapse.