Has peace broken out in Washington?

Several moments of truth fast approach – and the Dow and S&P have hit important Fib targets – and with negative momentum divergences ion the hourly charts.

Whatever the last-minute deals are currently, the US dollar has caught a bid this morning in a flight to safety. Many are calling for the end of dollar hegemony – and today in the Telegraph an article appears detailing the loss of confidence in the dollar’s reserve currency role.

But I believe the US dollar is in a major bull market and we are about to see another huge leg up surrounding the political dramas in Washington. I remain a long-term uber-bull. And when liquidity (credit) shrinks, the rush will be on for dollars, as most of the world’s debt is denominated in dollars, which will be in great demad to pay off debt and to pay the interest even. That is the backdrop – and I believe short positions in the euro and GBP and Yen will pay off big time in the months ahead.

But trade timing is critical, as ever.

GOLD

Despite very low bullish sentiment, gold continues its relentless w3 decline

Here are my short-term tramlines and target. I remain short.

My very long-term (months and years) target is well under $1,000 (as the dollar appreciates) – perhaps as low as $500-$600. There is a lot to play for.

EURO

Is making a H&S pattern on the hourly and the neckline is being tested this morning