Dollar Cycles Reinforcing Oil Outlook…

Dollar Cycles Reinforcing Oil Outlook…
Gold Also Poised to Turn Bullish.
Late-Dec./early-Jan. = Pivotal!

 

12/13/17 Weekly Re-Lay Alert – Transition Year Culminating:

 

“In January 2017, INSIIDE Track reiterated the big picture scenario that had 2017 expected to be a major transition year.  In many respects, that has proven to be the case.  In doing so, it corroborates the outlook for 2018 – and 2018 – 2021 – when this transition should shift into more definitive trends, moves & events.

One of the primary reasons for the 2017 distinction (as a transition year) was the 40-Year Cycle.  In particular, it was the 40-Year Cycle of Currency Wars that prompted this conclusion.

That cycle has been detailed throughout the past decade and has timed major economic/currency battles on a consistent 40-year basis.  Each time – since the 1770’s – this has included a conflict between paper (fiat) and hard currency (gold/silver).

On a multi-year basis, Gold was expected to see its first substantial advance (and subsequent decline) in 2016… The Golden Year.  That was projected to signal a multi-year bottom in Gold.  Following the fulfillment of that analysis, 2017 was projected to see the early stages of a larger-degree advance – with a series of diminishing rallies & pullbacks.

Following the multi-quarter ‘1’ wave advance & ‘2’ wave pullback of 2016, Gold was expected to see a multi-month ‘1’ wave advance & ‘2’ wave pullback – leading into a mid-2017 low.  (Those lesser-degree waves would be the building blocks of a larger-degree ‘3’ or ‘C’ wave advance.)

That mid-2017 low was projected to lead to a multi-week ‘1’ wave advance & ‘2’ wave pullback – leading into a Sept. 2017 low (later adjusted to Oct. 2017 low).

And that sequence could even see a lesser-degree advance & pullback – all part & parcel of a bottoming sequence.**  (All the while, Gold stocks – the XAU Index – signaled an early-year peak in early-Feb. 2017 and were not expected to set their next multi-quarter bottom until Nov. or Dec. 2017.)

Those lesser-degree ‘1-2’ & ‘1-2’ wave sequences were another manifestation of the transition period expected in 2017 – when Gold was expected to be building a base (but not moving substantially in either direction) for most of 2017.

(**Gold followed this general outline until early-Dec., when it broke below its previous low of early-Oct.  That ushered in the assurance of a lower low, instead of a higher low, in relationship to the early-Oct. low.  While violating that part of the 2017 outlook, Gold reinforced the expectation for a transition year in 2017.)

At the same time, the Dollar had been forecast – since 2014 & 2015 – to see an overall advance into late-2016/early-2017 before reversing lower.  That was fulfilled with the early-2017 Dollar peak and ushered in a transition year, in 2017, when the Dollar would see an initial decline & ensuing bounce (a type of ‘1’ & ‘2’ wave to the downside).

The Dollar has adhered to that outlook and is expected to signal/confirm a ‘3’ or ‘c’ leg down in early-2018.  That leg is still expected to last into 2Q 2018 (ideally May 2018) – when a bottom is more likely.

From a market correlation standpoint, that breakdown – when the Dollar confirms a ‘3’ or ‘c’ leg down – is when other markets (Gold & Silver, Stock Indices) are most likely to pay closer attention and potentially react to the Dollar’s movement.  Until then, they are more likely to follow their own independent factors & fundamentals – with relatively little consideration of the Dollar’s value.

Commodities & Oil markets were also expected to go through a transition in 2017, seeing a secondary ‘1-2’ wave sequence expected to transition to a more bullish structure in 3Q 2017.  All of that would be setting the stage for a steadily advancing bull market with its sights remaining on 2019 – when an accelerated rally is deemed most likely.

And Bonds & Notes (interest rates) were also expected to be transitioning in 2017, after peaking in sync with 80-year, 70-year & 40-year cycles in 2016.”

 

2017 confirmed as Transition Year with oil markets playing their part.  The overall Energy outlook remains bullish into January 2018, triggered by mid-year buy signals in Unleaded Gas & Heating Oil.  Dollar & Gold cycles shifting & could/should trigger new rally in metals & oil in second half of December.

See Weekly Re-Lay & INSIIDE Track for additional analysis and/or trading strategies.