Chart of the Day: Are You Hedged?

JC Parets
June 10, 2022

Whenever in doubt, zoom out!

That's how I learned it. Mostly the hard way.

And that's something we like to do once a month, is really zoom out.

Monthly Candlesticks are great for that!

During this month's review I really noticed how much stronger some of the European Indexes were. Especially this one here:

This is $HEDJ which is represents European Stocks, but priced in local currency.

The strong Dollar over the past year has really put a lot pressure on equities.

But when you take away the strong Dollar, the picture looks much different.

So for me, at the very least, this chart of Hedged Europe reiterates the point of just how important the moves in the Dollar have been in recent years.

You can't help but notice the dramatic differences between Indexes priced in USD vs local currency.

Japan priced in Yen vs Japan priced in USD couldn't look more different.

I continue to think that investors will have a hard time making money this summer being long most stocks or crypto unless the Dollar starts to fall.

I truly believe that and I'll let the market prove that wrong.

For now all it's doing is confirming exactly that.

You see the Dollar today? And what did stocks do?

Now let's see how they finish the week..

I know I'm being Mr. Macro guy in a stock market conversation here, but I'll be whoever I need to be if I think it can help make us (or save us) some money.

What do you think?

Agree?

Or no?

Shoot me a note

- JC

 

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