We are financial market enthusiasts using methods expressed by the Gann, Hurst and Wyckoff with a few of our own proprietary tools. Readtheticker.com provides online stock and index charts with commentary. We are not brokers, bankers, financial planners, hedge fund traders or investment advisors, we are private investors.
The wave of dollar strength is rolling over, how to ride this break will be commodities.
More on the subject here :
WallStreet likes a higher dollar as stock commission flow well through their broker accounts, not so much when commodities are the bull in charge.
USA debt, main street woes and re shoring of manufacturing requires a lower dollar. Even the Pentagon knows it can not off shore missile manufacturing offshore.
Chart 1 - USD (DXY) to slump over time.
Chart 2 - CRB will run hot into 2030s.
Chart 3 - Break out to new highs for gold and silver stocks.
It is not what you don't know that gets you. It is what you now for sure that is not so, that gets you. Mark Twain.
Chart 1 - Copper stepping higher on expected strong demand vs expected supply issues.
Chart 2 - When copper out performs gold (red line), bitcoin (black line) is moving higher fast (yellow zones).
Chart 3 - The true fed balance sheet (red line). The red line includes all the government tricks, and the biggest trick is the Dept Of Treasure issuing TBill's in the trillions. Note the total of $17T for the red line. The biggest economy in the world lives off a quarter to quarter credit card of $10 trillion USD (green line). The reported fed balance sheet is the blue line.
Chart 4 - Debt spiral watch. When the red line is above the blue line, US debt to GDP (pink line) moves higher fast, or in other words the debt levels explode. Blue line is Nominal GDP (or GDP including inflation). Red line is Real effective interest rate (US 10 yr less inflation) plus US deficits as a percentage of GDP.
Chart 5 - Stock market valuation method. When the red line is above the upper pink line then stock market tops are near. Red line is the NYSE Margin YOY% change with the Shiller SCAPE ratio. Green line is the YOY% change of the Dow Jones. Currently the red line says stocks can go much higher.
They say nothing works all the time in markets, well maybe some should review Wyckoff logic.
Quotes:
..“The market always tells you what to do. It tells you: Get in. Get out. Move your stop. Close out. Stay neutral. Wait for a better chance. All these things the market is continually impressing upon you, and you must get into the frame of mind where you are in reality taking your orders from the action of the market itself — from the tape.”...
.."Tape reading is rapid-fire horse sense...The Tape Reader aims to make deductions from each succeeding transaction -- every shift of the market kaleidoscope; to grasp a new situation, force it lightning-like through the weighing machine of the brain and to reach a decision which will be acted upon with coolness and precision"..
Richard D Wyckoff
The longer the base normally leads to a greater prize!
Chart 1 - HMY moving in lock step with the Richard Wyckoff Accumulation plan.
Chart 2 - The Richard Wyckoff Accumulation map. Notice the change in behaviour of price action.
Trump has lowered the US dollar, this has allowed China to print.
Note: All the charts below have been built on readtheticker.com 'comparison' chart functionality.
Chart 1 : Favorable US dollar, interest rates, and corporate credit conditions lead the ISM PMI manufacturing activity. The first half of 2025 has seen CEOs sit on their hands while they wait for the TRUMP disruption to settle. These CEOs will roll the dice and produce more as they will see demand from sales orders in the second half of 2025 going into 2026. Just in time for the TRUMP midterm elections.
Chart 2 : The USA ISM PMI manufacturing index has a relationship with the Chinese 10 year bond rate (inverted). The Chinese boom and bust 10 year bond rate represents the effect of world demand for Chinese goods and the delayed effect on Chinese inflation. As in chart 1, the second half of 2025 and 2026 looks positive for USA manufacturing.
Chart 3 : The reason why Chart 2 works so well is because the boom and bust cycle of the Chinese 10 year bond rate is associated with the Bank of China money printing periods. More money printing is expected from the PBOC to try exit their current deflationary woes.
Trump wants the House and Senate to remain with the Republicans for his full 4 years.
To do this, Trump must get the American dream back on track during 2026. On the back of a lower oil price, tame inflation, with consumer demand shooting higher. This means he wants the US dollar down, interest rates down, oil down. The big three all at once, wow!
However, during the second half of 2025 a massive period of US debt refinancing is in his way ($13T or more), to overcome this, Trump needs a lower US Treasury 10 year interest rate, this is why oil and inflation must be tame, and maybe the economy a little soft or recession lite.
No wonder Trump wants the Russian war over, because Russian oil back on the market will help with his goals.
Also, Trump is forcing more fiscal military spending and more debt onto European nations. This means European interest rates will rise. This will move the $EURO higher and the $USD lower as interest rates adjust as the world realises Europe's free military ride is over.
China is in a slump. They want the world to have lower financing costs, so the world can buy more Chinese goods. To do this the US dollar must be lower. Xi and Trump will be doing a nice deal in May 2025.
Of course a lower US dollar, with lower world financing costs is great for Technology and Crypto holdings.
A good summary by Louis-Vincent Gave (Founding Partner & Chief Executive Officer of Gavekel).
Gold and silver miners need two things: Higher metal prices (on a lower US dollar) and cheaper energy costs. This will ensure profit margins are healthy. Which means higher prices for XAU, GOLD and SILVER.
Of course prices will not move in a straight line, many wobbles before prices reach there peak.
Gold knows something is up, or in other terms the bankers who have been buying tonnes of gold do.
WARNING SIGNAL SUMMARY LIST
When ever the blue line crosses the magenta line some sort of crisis is known.
This means GOLD YOY% change is out pacing COPPER YOY%.
The big cycle of the Dow is still working, and it should be a good year in 2025.
Chart 1 - The 100 plus year of the Dow Jones Industrial's.
Note: Draw with readtheticker.com cycle software.
Chart 2 - A close up of the above cycle since 2009, and its working quite well. The Dow will most likely creep along the upper blue line to +50,000.
Chart 3 - 2025 is also the post election cycle year. President Trump will need to make good on promises to go into the midterms, so you can bet he wants a happy time for his first year (of his second term).
Chart 4 - Bitcoin cycle looks strong into 2025. Bitcoin is a global liquidity measure and it looks bullish as we all know the USA needs to refinance 33% of its debt in 2025 (about $13T). To to do this the world needs to be flooded with US dollar liquidity. They will do what ever it takes to refinance, otherwise the $USD will soar and risk on assets will sink.
The dominate cycle shows the way into bitcoins future.
The low target is $200,000 USD for Bitcoin into 2025/26.
There will come the day when investors will have to believe the coming down cycle, our guess on too hot inflation (just like the last cycle peak) and expected interest rate hikes.
The USA new administration is going to free up risk on.
TRUMP is a crypto friend, and he will remove the dark cloud of legal attacks on the industry. This will allow scared and new money to come back into crypto.
Ethereum is a sleeping giant, price action since Trump election win is supportive of a good rally ahead.
China is warming up stimulus to escape deflation. This means Chinese M1 is a priority number to watch.
Chart 1 - China is still in deflation and she can not stay there.
Wall Street bankers have stated that the PBOC must ramp up M1 (via QE) to be over M2, otherwise a Chinese (maybe world) deflation crisis in 12 months will be deeper and harder to get out of. (Reference ZH).
Extract from ZH post..
Goldman's Borislav Vladimirov, who makes a very simple case: China now has no choice but to activate QE - just as we have been saying all along.
If it doesn't, M1 will fail to grow faster than M2, and the government "will spread the monetary crowding out to more weak borrowers in the economy", since the winners will save the impulse and kill the multiplier, resulting in an even bigger hole for China 12-18 months from now, and global deflationary destruction.
On the other hand, if China does do QE, oil will soar, and bitcoin and gold will be orders of magnitude higher once Beijing triggers then next global reflationary tsunami.
Chart 2 - Chinese M1 swings correlates to the GDP Deflator index above.
Chart 3 - When China does QE, it will affect oil prices and world inflation (green arrows). So forget about inflation being transitory, as a decade of sharp hot and cold inflation cycles is here to stay. Any period of hot inflation will be elevated risk for countries with very large sovereign debt levels (like the USA), another reason for elevated gold prices.
Chart 4 - US PMI does well with exploding Chinese M1 (with a 5 month lag). Manufacturing around the world does better. An inflationary boom is near. That is rising world GDP with rising world inflation. Of course, just how fast inflation vs GDP rallies will be the hot issue. 2024 gold prices say inflation will be a very hot issue.
The last 100 years USA debt to GDP has exploded on the back of wars and crisis.
The first chart shows how and when this came to be.
Chart 1 - US Debt to GDP%.
The US Debt to GDP% ratio can be fixed in a few ways:
1) Revalue selective assets on the USA balance sheet higher: 8,000 tonnes of gold is currently valued at $34 USD an once. This could be revalued to $10,000 USD and once.
2) Massive production miracle to boost GDP from some new technology.
3) Cut spending and pay back the debt. Very hard politically and a world wise depression may result.
4) Inflate prices higher while debt stays the same (just like Israel did after several wars). Most likely!
Chart 2 - How Israel fixed its debt problem. Israel inflated the debt away.
Short Answer: Higher inflation and suppressed interest rates are coming to the USA very soon, to simply deflate the debt away.
Currently USA debt to GDP% is around 122%. This can still go to +150% before Congress deals with the debt. The may be a election issue in 2028, as the interest expense costs becomes too much to bear.
