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#Deflation unfolding - but as in all moves - we will always see counter-moves or corrections. Last week was such a correction. We must not drop our guard! The economic situation is dire and we are not through the illiquid phase. Major developments ahead! Stay tuned for #HZupdates
It is all about #USD. Last week was a retracement in the new strong spike for #DXY = wave ii (blue). Within days, DXY will likely start strong rally higher - reaching min. 109 within weeks. End target will be reached later this year ~122 #HZupdates
The rally in #DXY is caused by extreme USD shortage. #EURUSD will feel the strength. In fact, it seems to me, that we are about to see a very strong decline in EURUSD within days/weeks to ~0.97-0.98 before a sideways bounce. LT-target remains the same: ~0.85 to be reached this yr
#AUDUSD will also feel #USD strength. Bounce last week - setting up for the next push down. Please note the consistency in this chart🙏 I have I had <0.5 as target since 2018! Note! DEFLATION ends at the end of this move!! #HZupdates
Like #DXY, we have seen a pullback in #USDJPY last week - again wave ii - which sets us up for major move higher to begin really soon #HZupdates
DEFLATION ends at end of the next move for #AUDUSD. This will coincide with final move down for #Oil. Target is ~8.5 for LT-bottom = SECULAR BOTTOM. Importance of this bottom cannot be exaggerated! This ends >20 yrs old deflationary regime - and sets economy up for #Stagflation
Why #Stagflation? Because Secular Bottom in Commodities will be in after coming drop (see #Oil and other coming charts!) BUT #Copper model shows us, that we are nowhere near bottom i.e. economy will be in decline until at least end 2021. Hence, rising prices while economy slumps
#Commodities #CRB has as expected dropped fast since break of sideways triangle. But - we are not there yet. Normal in Ending Diagonals are Throw-over. Target is lower - but to be reached in final phase of #Deflation #HZupdates
#Wheat also in similar Ending Diagonal. One last plunge below the blue trendline is expected, before we move into the new economic regime. Hence, last phase of #Deflation - before #Stagflation
What worries me greatly, is the coming phase of the crisis #Stagflation! VIX has shown what happens after Ending Diagonal has ended --> BOOOM! Imagine this happening with #Commodities in a world economy in recession! Riots, political fall-outs, EU break-up? #HZupdates
Why EU break-up? Observe Italian 30 YR Government Bonds. Neg. divergence suggesting much lower levels to come --> Interest rates up!! EU Debt Crisis II coming imo #HZupdates
While German #Bunds look more like safe harbour - and is expected to decline further. May bounce ST :) All in all - an asymmetric development in EU.... how to solve this...?! #HZupdates
But back to #Deflation. It is clear, that inflation has plummeted. And the last phase in deflation (Remember Wheat, CRB, Oil etc.) will bring inflation even lower the coming weeks/months. #Gold and #Silver will be strongly influenced by this #HZupdates
#Gold has topped at 1703 and has declined in wave 1. Just like #DXY, #EUR, #Commodities etc. we had a relief moment last week and Gold rallied in a "Sucker's Rally" =wave 2. When this is done - Gold will decline with a pace nobody gets. Outright Crash!! USD shortage is merciless!
#XAGUSD has led the way for #Gold. Anybody thinking Gold will defy this is disillusion. However, Silver has also not bottomed yet. LT-target and SECULAR BOTTOM is ~8.4. There will be a time to be long Precious Metals - but it is not now! #HZupdates
Last phase of #Deflation will also be hard on #Equities. While we may see weeks of sideways movement in #SP500, we have not seen the bottom yet. I expect triangle to form - before plunge towards ~1800 #HZupdates
Following last phase of #Deflation, we will see a great bounce in #Equities. From ~1800 to ~2600 as wave B unfolds. This is however, not an all-clear signal as next phase of #Stagflation will crash #SP500 to ~1000 pot. by end-2021 (Remember Copper?). Tough times ahead! #HZupdates
That is all for now! Tough times ahead - but also FANTASTIC opportunities! Gold, Silver, Miners, Bitcoin will be havens during coming phase - but not yet! TAKE CARE - stay safe and healthy! Kind regards from Copenhagen!
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I will soon introduce #HZupdates as WEEKLY service at fee of 20 USD/month. I spend a lot of time on analyses and has so far offered them for free. I need to change that. There will be no trade recommendations! Only what I see ahead in markets as you have been used to. Interested?
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