Major Changes In Trends

JC Parets
July 31, 2022

Are you watching?

Look what stocks and Crypto do with just a little tiny bit of Dollar weakness.

In fact, US Dollar Index Futures are only down 3.0% off the highs.

And look how stocks have done since the Dollar stopped going up a couple of weeks ago:

The S&P500 is up almost 7%, Nasdaq up 8%, Dow Jones Transportation up almost 9% and Mid-caps up over 9%.

Those are real returns with just a 3% dip in the US Dollar.

We'll be discussing all of this Monday night August 1st @ 6PM ET at our Monthly Charts Strategy Session that I host Live at the beginning of every month. Premium Members can register here if you haven't already.

Or give us a call to join us Monday as a Premium Member: (323) 421-7910

Now here's a much different look at the Greenback. The EM Currency Index gives us a different perspective than the developed market dominated US Dollar Index.

Look at that potential failed breakout in US Dollars vs a basket of EM currencies.

From failed moves come very fast moves in the opposite direction, is how I learned it.

With stocks ripping over the past couple weeks, imagine what a real Dollar decline looks like?

Meanwhile, Bitcoin is up 16% during that time and Ethereum is up over 40%.

These assets really like a weaker Dollar.

I continue to believe that stocks and crypto need a weaker dollar to do well in the back half of this year. The reason I continue to believe that is because the market keeps proving that to be the strong underlying trend.

You can bet on those correlations changing if you'd like. But that's not the bet we're making.

I think if the Dollar is weakening here, we want to be long the riskiest of assets, including stocks and crypto.

Let me know what you're thinking.

JC

 

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