Tuesday, October 13, 2009
In the most current Elliott Wave Theorist (published September 15, 2009), Bob Prechter presents the following close-up of the Dollar Index since that trend-turning bottom. (Above.)
To me, consensus seems to be the process of abandoning all beliefs, principles, values and policies. So it is something in which no one believes and to which no one objects.
Oct 13, 2009: 10:41 AM CST
By Corey Rosenbloom, CMT
I wanted to share an excerpt from an article from Elliott Wave International and analyst Nico Issac who wrote, “Before You Mourn the Death of the Dollar, Check this Chart.”
Mr. Issac notes the following two factors in contributing to bearish sentiment on the US Dollar:
An alleged (and later denied) secret meeting among leaders of certain Arab States, China, Russia, and France which aimed for the immediate discontinuation of oil trading in U.S. dollars.
And, an open statement from one senior United Nations official that proposed the dollar be replaced as the world’s reserve currency.
He also notes a similar ‘chorus of negativity’ that occurred in early 2008.
Excerpted from the article:
“The U.S. dollar stood at an all-time record low against the euro after plunging more than 40% in value. And, according to the usual experts, the greenback was “dead”-set to meet its maker. On this, these news items from early 2008 say plenty:
“The dollar is a terribly flawed currency and its days are numbered.” (Wall Street Journal quote)
“It’s basically the end of a 60-year period of continuing credit expansion based on the dollar as the world’s reserve currency.” (George Soros at the World Economic Forum)
“Greenback is losing Global Appeal… the ‘Almighty’ Dollar is Gone.” (Associated Press)
YET — from its March 2008 bottom, the U.S. dollar came back to life with a vengeance, soaring in a one-year long winning streak to multi-year highs.
Nico concludes the article by saying:
“It’s crucial to understand that markets don’t necessarily respond to sentiment extremes immediately. But, such extremes do indicate exhaustion of the trend — which is usually the opposite of what the mainstream expects.”