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Friday, May 31, 2013

Elliott Wave Update ~ 31 May 2013

The squiggle count suggests that a "third of a third" wave down is near.
On a monthly scale, the market is still overbought.
On a weekly scale:
USD.  Stealth long term bullish pattern.  Most of the pundits will definitely be caught off guard with a dollar that refuses to "die" despite the seemingly "fool-proof" case that it should collapse.
Its not the dollar that's worthless (yet). Its bonds.  Since we are a credit-based economy, credit must collapse first.  And the mass selling of bonds will be conducted in dollars, resulting in a great demand for cash (actual and digital).  Once the credit bubble bursts and bonds go bankrupt (as they must - the math dictates it), then we can talk about the worth of the dollar itself.

The 6 month yield also sports a potential long term turning bullish pattern.   Rising yields will wreak havoc on the extremely over-leveraged (world) banking system and massive interest-rate derivative market.  Additionally house prices, credit card debt, student loans - everything will become unserviceable fast.

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