The Dow Jones Industrial Average and Dow Jones Transportation Average are both hitting new 52-week highs.
These are things we see regularly in uptrends. Not so much in downtrends:
Notice how prices really started to head higher in October last year when the US Dollar peaked.
That was the catalyst all along. See here.
It wasn’t the Fed. It wasn’t the Mid-term elections. It wasn’t the inflation.
It was the Dollar.
Here’s what that looks like now as the Dollar broke down to new 52-week lows and retested the breakdown successfully this week:
So the question is simple: Is this another major breakdown for the U.S. Dollar, which will serve as the catalyst again to drive stocks higher?
Or is this just a whipsaw and the Dollar squeezes higher into the Fall?
Here’s what that would look like:
For me, if the US Dollar Index is below 101.50 then we want to continue to buy stocks very aggressively.
That strategy of buying stocks on the back of a weaker Dollar has worked for over 3 quarters now.
“If it ain’t broke, don’t fix it”, is how I learned it.
So this is the bet we continue to make.
If you missed it, be sure to catch the replay of last week’s LIVE Conference Call where we went over all the best ways to profit from this current environment.
Let me know what you think!
Are you long enough?
Or do you think you’re too long?