I don’t have an exclusive pipeline to the most powerful banking executive in the world. I don’t need it and neither do you. Just listen to what he says and connect the dots. Luckily, in this case, they are easy to connect, explains Jeff Greenblatt of Lucas Wave International.
Trading is a lonely endeavor. That being said, I’ve always looked forward to watching Jackson Hole week as I never get to see anything like those mountains as a backdrop. My wife likes to joke I’m a shut-in. The only mountains I get to see are bull markets on my 15-minute chart. The past couple of years that joy has been taken from us and consequently I’ve been reduced to actually listening to Powell’s speech from his office. Recall the hype last week as a lead in, Powell was going start a tapering process on all the stimulus or more particularly, the bond-purchasing program.
One doesn’t need to understand my Kairos vibrations to realize easy money is ruining the US dollar and a true taper likely would’ve caused the greenback to rally. The opposite is also true. Not mentioning a timeline for a taper would signal to the speculators they were more interested in keeping the stock market up.
He didn’t even try to save the dollar. I don’t know how many people out there truly understand the dangerous position the dollar is on a price chart. Aside from making the greenback the sacrificial lamb in my opinion, the other major takeaway is that inflation is transitory.
I have a serious problem with that position. Since I called it out on August 20, the US currency, which is the world’s reserve currency, is in a downtrend. The only thing in question at this point is whether it already is a new fresh leg in the bear market that started March 2020. If Powell realizes by not being more hawkish on tightening, he is at the same time hanging our currency out to dry, he shouldn’t be saying inflation is transitory.
My readers and clients are completely dialed into this situation as I believe the outcome for the dollar in this 161-month cycle season has the potential to be the most important financial event since the financial crisis in 2008. Recall, the actual top of that pattern came in July 2007 on the Russell 2000. The crisis didn’t hit for another 14 months. The dollar topped 18 months ago on a 144-month high. You can look it up, I told you at the time I was comparing it to another major 144-month top which materialized in 2012 on corn. That chart lost nearly 60% over the next two years. If there is to be a crisis, it will happen if the leg that started two weeks ago on an excellent vibrational reading. We could be staring down the barrel of a 3rd or C wave down.
Getting back to Powell, people who don’t know the chart will accept the transitory comments at face value. Mr. Powell, who likely knows better must realize further erosion of the greenback’s value as time goes on will be anything but transitory. My takeaway is the Fed has been the backstop of every industry in this country they wanted to bailout, why would they stop now? They’ve been printing trillions over the past 18 months; he has to be all in on the market. They can’t possibly think they can endlessly print more money with no repercussions, do they?
Let’s look at the chart as of Wednesday’s trading session. Starting with Powell’s speech, we got a fresh leg down, which ended the last bounce which came in on an interesting vibration and perhaps could’ve put up a better fight to retest the high under more favorable conditions. Consequently, the pattern ended up in the weakest part of the channel but failed again and currently retesting Wednesday’s low. The vibration behind the low? From the high at Powell’s speech, it was 42 hours down. On a 240-minute chart, its roughly 42 bars down from the top. A decent reading, which under better conditions should launch a bigger reaction but only a day later its being retested. That can’t be good. Are we witnessing central bankers around the world systematically dumping what will eventually not be the world’s reserve currency?
So, lets wrap up on a positive note. I put up a 15-minute chart so you can see how replication works. We had a range off the top of 1.355. The first pullback you see has a range of .135. The next pullback is basically a 35% retracement of a move up of .365. These are the types of vibrations the market offers us every single day. We can take advantage of these replicating vibrations if we make ourselves available to what the market is sharing. The problem is most people have no idea the market offers this type of precision. Gann taught the foundation of this methodology 100 years ago. All I’m doing is following through on what he taught on a daily and weekly basis. Obviously, he didn’t have access to the type of powerful computing we take for granted in the 21st century. Welcome to September, it could be quite a ride!
For more information about Jeff Greenblatt, visit Lucaswaveinternational.com.
