Subscriber Update 3.24.2014

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Good trading all.

Steve Chapman, TRI


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10 comments on Subscriber Update 3.24.2014

  1. Pablo
    March 24, 2014 at 8:19 AM (8 months ago)

    agree with dollar going up, but when the european markets go down as well, the euro could also go up?

    • Steve Chapman
      March 24, 2014 at 8:24 AM (8 months ago)

      The Euro is almost 60% of the dollar and it is at it’s upper trendline with a failure above 1.40. If the dollar goes up strongly the Euro almost has to go down.

  2. Delboy
    March 24, 2014 at 8:32 AM (8 months ago)

    Steve,
    The euro price of gold is currently €950/oz. From the comments above, you expect gold to bottom in 2015/6 as the USD tops. If you expect EUO to potentially rally 40-60%, the euro could fall by say 25% versus USD from $1.38 to $1.05. If you also expect gold to drop to say $1,000 that would mean the gold price in euro terms would remain relatively unchanged at €950/oz. I am an investor based in Europe so I wanted to check if these estimates are in the ballpark for what you are expecting? I have a relatively large % of my net worth invested in gold and am trying to decide whether to lighten up or ride it out. Thanks

    • Steve Chapman
      March 24, 2014 at 8:43 AM (8 months ago)

      My target for the Euro is +/- 1.10. I think that psychologically gold will probably try to run the stops below $1,000 to end the bear or this first section of the bear in US Dollar terms. I don’t know what your original purchase price is, but if that is a drawdown that you can handle then it probably makes sense for you to hold on because of the transaction costs of buying/selling physical several times. Physical gold is insurance, and just like a life insurance policy you don’t sell it just because your body feels pretty good on any given day…you hold it for the things you can’t predict.

      -Steve

  3. Dutchisu
    March 24, 2014 at 9:27 AM (8 months ago)

    Steve

    Where do you think we are at in the cycle counts? I have us on day 15 for gold so I was thinking a DCL later this week would line up well with the bottom of wave 1.

    • Steve Chapman
      March 24, 2014 at 10:43 AM (8 months ago)

      This is one of those times where it is easier to use Waves instead of just cycle timing. I’m not going to be playing the long side and I don’t know where the next bounce will occur. I always look for capitulation volume, momentum divergences, and stop runs, but there were way too many weak hands that were overleveraged and the market won’t give them their money back. I will just wait for a short squeeze as a signal that price is temporarily done to the downside.

  4. kewl2
    March 24, 2014 at 10:04 AM (8 months ago)

    Steve — just want to make sure I understand — if this is Wave 1 of 5 and we have just seen Wave 1 down of Wave 1 of 5 – is it logical that Wave 2 up of Wave 1 of 5 would happen quickly (overnight?). Is the strategy of a “Wave 2 up” being to trap the new bear positions versus a more drawn out rise aimed at bringing back the bulls (before Wave 3 down starts)?

    Thank you for fantastic coaching – your updates are great!

    • Steve Chapman
      March 24, 2014 at 10:45 AM (8 months ago)

      The Wave 2 up would be the market’s way of shaking out the bears before a trending move down. It could very well be a gap up over a 1-3 day time frame.

  5. Catfishbruin
    March 24, 2014 at 10:10 AM (8 months ago)

    Hi Steve,

    Just wondering if you can comment on the Russell? Looks like it could be a leader to the downside here..I was looking at IWM

    Thanks

    • Steve Chapman
      March 24, 2014 at 10:47 AM (8 months ago)

      I was looking for a move down in stocks because the VIX was too low for another leg higher. The market needed more shorts and fear in order to have the energy for another move up. The current daily cycle might bottom on the jobs report on Friday.