Just the Facts

CYCLES - I'm really not sure why the market is ignoring the fact that everything is cyclical. It's true, the stock market has been going up and up and up and has felt like it will never come down...EVER! It has gotten to the point that well informed people just use this as the basis for their long exposure. "It can't go down!" And as much as I recognize that this argument his highly convincing and rests on a strong foundation of compelling evidence, for some reason, I'm struggling to accept this bias. The simple fact is this. The market is hanging onto something that it really knows won't be there forever and is having a hard time letting go. But just as the sun rises and sets, so too will the stock market. I have even gone to great lengths to highlight the fact that even the idea of a healthy correction is no longer something that can happen. This of course is insanity and with all of the writing on the wall, you can bet we are about to see something spectacular.

cartoon april 12

STRANGE - The price action this week in markets is completely reflective of the insanity and has infected the US Dollar as well. In a week of diminished fear associated with Dollar bearish US protectionism and above forecast US inflation readings, the Dollar has stumbled and fumbled. There really hasn't been anything other than "the Dollar sold off because that's where the big money is playing it" reasoning behind the price action. At the same time, when we look at both the Euro and Pound against the Dollar, the medium and longer technicals for both charts are suggesting that even if we see both major pairs race back to their respective 2018 high, there is plenty of resistance through those levels, following some already big runs over the past several months that would suggest the next big move could actually be in the Dollar's favor. And so, this is how I'm looking at things out there at the moment. It really has been a strange year thus far, with that quiet consolidation seemingly a front for some wild rage within, that feels like it could be getting to break through. GOLD has been an excellent example of this, as it repeatedly bangs up against the door that is 1375, refusing to back down and committed to piercing the threshold. When that happens, look out people!

So much tension in markets right now beneath a surface that is trying to hold it down.

The Case Against the US Dollar

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