Links to some charts are posted but first lets discuss the "recovery". 

Gold just finished exploding on the news that Austraila raised its interest rates.  Inflation speculators wasted no time to jump on this chance to send Gold to a brand new record high. 

The thing you learn about the market however the longer you are in it, is that it very often moves to hurt the most people. 

Everyone and their dog are bullish on Gold.  1200, 1500, 2000, 5000, 15000 LOL   There are many arguements why Gold should go up, and not as many to be sure why it wont, at least just yet. 

The USD, has the exact opposite case and scenario.  Most people say it will be toasted forever, very few think it will go up . 

I think you see where I am going with this.  Now add in the markets.  Since 2000 when the tech bubble burst after 20 years of solid buy and hold investing, the market has changed.  It heavily corrected and then recovered in early 2003.  Now we come to the big problem. 

GREED from years and years heaped with more greed created a bubble of its own.  Lehman, Fannie, now we are up to about 100 bank failures, these are not small problems folks.  So of course when they became public knowledge the market reacted just how you would expect, FEAR.  The two most dominant emotions that drive the market and even the economy. 

Now we come to my main point.  What has changed since a bunch of greedy good for nothings ruined the economy?  I tell you what, not a damn thing.  The government threw a bunch of money at the problem and people got greedy all over again driving the markets higher thinking everything is going to be just fine.  HAH. 

The first clue that they learned absolutely nothing is look where some of the money went, MORE AIG bonuses.  Here is the government bailing out a failed business model to try and save the day and the greedy no good SOB's pay themselves an immediate bonus with the money? 

The list goes on here, Chrysler, Citi, look at it seriously and you realized nothing has changed.  The piper was not paid and the dumb motha's never even changed many of the policies that brought everything down in the first place. 

Now look at job numbers.   I'm not going to go any farther, lets just say that there is overwhelming evidence that we still have all the same problems we did when this all exploded. 


Okay now some charts.   Back to how the market moves to hurt the most people.  So everyone is bullish on Gold and with good reason, after printing a gazillion dollars eventually the USD will have to pay the piper.  This will not happen until we are really in an inflationary environment and right now we are not.  Austraila is the first to push this envelope but I really think this is premature. 

We have just witnessed one of the strngest rallies in all of history.  Truly greed took over at some point and this right now is NOT trading on fundamentals but on "thin air".  So what I see here is the "deflationary" environment is about to come back, in a big way.  This means that commodities like Gold, Silver, Copper, Oil are all going to go back down and the USD believe or not, and I know most wont, will go back up.  Most people realize the USD has been inverse to the markets since about 2003 and when we crashed last fall guess where the dollar went, UP. 

Right now, I see definite signs that Gold may be hitting a "top" and the USD will be bottoming very soon.  These charts show Elliot Wave patterns and are complex to explain but I think you will see the patterns I am refering to. 
So while i think the USD will eventually bite the big one, I dont think its time is just yet since the markets have got WAY ahead of themselves and the economy, and I am not talking about the usual 6 months ahead. 


Food for thought.   Happy trading


Jay



USD 3 year weekly   http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3307499&cmd=show[s166012359]&disp=P 

USD 8 month daily   http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3307499&cmd=show[s166332171]&disp=P

UUP ETF  30 Min 1 month   http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3307499&cmd=show[s175999624]&disp=P


Gold 3 year weekly    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3307499&cmd=show[s166205755]&disp=P


Gold 6 month daily    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3307499&cmd=show[s166205754]&disp=P


S&P 500  1.5 year daily     http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3307499&cmd=show[s165792996]&disp=P