Let’s Look at the Dollar

Since the dollar has been a far more useful gauge of volatility, let’s take a look.

On the one hand, this simple trend line support looks bad (for equities):

DXY

That is finding support. And if we see continued dollar strength (in this environment—right now equities and the dollar are inverse forces and that is not always the case), equities are more likely to follow the bearish path.

However, there is another trend line. Let’s zoom way out:

I am expecting Pink C of Yellow b to be put in place soon:

DXY

But if use a different origin for the trend line, we get this, and we also happen to be a great fib relationship for the legs of this large structure (the 78.6):

DXY

And that is why, despite the news flow and the macro environment as we perceive it (and our perception of that could be wrong—smart money could have a totally different understanding of affairs right now), we cannot rule out the bullish case.


Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.


Leave a Reply

Your email address will not be published. Required fields are marked *