Gold, Euro, $, SPX

Medium-term:

Fundamentals on the EURO are more bearish than those on the dollar, so the EURO will fall to 1.31. I think that this may happen in the short-term, after a terminal move up.

The rising channel on the dollar is immediately below us right now. This is bearish EURO.

A falling EURO will create headwinds for US Equities. It is more difficult for equities to rise with a rising dollar. However, it has happened often.

I believe that US Equities are headed up to 1200 at least; it's just a matter of how long it takes. I believe we should be there by end April, which gives us about 7 weeks. Average gain implied is 12 points per week, but in bullish weeks it could be 20-25. Buy the dips in equities. There is a ST floor around 1113.

This implies that equities will disconnect from the Euro.

In the medium-term (2 months), I also believe that Gold is going to new highs around 1250-1300.

Short-term

Gold will go up to 1155 or so before any correction, and perhaps to 1160. Equities (ES) will go to 1123-30, I believe.

The dollar is at the bottom of its up trend channel - 0.37 away (about .74 on the EURUSD). That implies a target of 1.372 or so on the EURUSD, if the dollar hits the bottom of its channel. That means an upside target of 1145 on Gold. It is also a possible bearish indicator for equities.

However, I am quite sure about the Gold target, especially because my target for Silver is quite far away (3% or so). Gold could certainly rise with the dollar, but there would be headwinds if the dollar bounced sharply. This implies that the dollar will not bounce sharply (or not bounce sharply uncorrected) until my PM targets are reached. This is bullish for the EURO.

Sentiment on the Euro is massively bearish, which implies that there may be an downside breakout, out of the dollar channel. The EURUSD channel is quite far away on the upside so there is considerable room on the upside. A downside breakout of the dollar channel is possible; it would be difficult to accomplish, and it will likely be retraced quickly, but given the humongous bearish sentiment against the Euro, it is possible.

Humongous bearish sentiment is common in Wave 4s up. Also, Wave 4s can be choppy and last for a while. This means that we may have a marginal break of the dollar channel. Use breaks to go long the dollar, short the Euro.

Short the Euro aggressively when Gold gets to 1155.