The chart is reproduced above. The crucial piece of it, based on our proprietary Hidden Pivot Method, is the 77.52 peak achieved during Monday morning’s strong opening. Notice how that peak slightly exceeded an earlier one at 77.49, creating what in Hidden Pivot parlance we call a “bullish impulse leg” on the hourly chart. The implication is that any pullback such as the one that occurred yesterday represents a buying opportunity in expectation of a very likely follow-through rally.  We mention that the chart sent a chill down our spine because the pattern is strikingly similar to one from which the Dow Industrial Average emerged, in 2006, following a period that some chartists may have viewed as a six-year topping pattern. As bearish as we were on the economy at that time, the long-term bullish implications of the pattern could not be ignored.  Now, the same holds true for the dollar, even though the relevant pattern is occurring on the hourly chart rather than the monthly. What it says – very clearly – is that the Dollar Index is about to leap to at least 79.86, or about 2.7% from current levels. If so, it could be just the beginning of a much larger move, since a print at or near 79.86 would create a fresh “impulse leg” on charts of even higher degree (i.e., the daily chart).

Although we never claim to have a crystal ball, the inescapable implication of a sharply strengthening dollar is that Europe’s financial crisis is about to come to a boil.  Traders and investors should plan accordingly.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts.  Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2010, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Thursday, 22 September 2011 | Digg This Article