How was your summer?

Ready to make some money this Fall?

Last night was our LIVE Monthly Charts Strategy Session for Premium Members of Allstarcharts.

This is where we go over everything happening in the current markets.

The chart of the S&P500 is a great representation of the circumstances right now.

Stocks are correcting and stuck in a range during a perfectly normal time to be digesting their historic gains.

This is the video recording of our September 5th Monthly Charts Live Strategy Session

From the Desk of Ian Culley @IanCulley

“Can’t Stop, Won’t Stop” blared the cover of Bloomberg Businessweek less than a week after the US Dollar Index $DXY peaked last September.

Unbelievable timing.

We can’t make this stuff up!

While the DXY has undergone a significant correction since, the message is just as appropriate today as it was then.

The dollar can’t stop.

It’s ripping higher this morning, breaking to fresh six-month highs as it nears a key area of former resistance.

Those mounting breakouts and breakdowns favoring the USD from mid-August are sticking their moves. 

Have no fear, or "FOMO," if you missed any of those trades.

These next two dollar pairs offer well-defined entries using one of my favorite short-duration chart patterns…

The flag.

From the Desk of Ian Culley @IanCulley

King Dollar is bouncing around as we approach Labor Day.

Last week’s strength is evaporating.

Meanwhile, global currencies claw back recent losses as cryptocurrencies and gold’s crazy cousin, silver, enjoy a much-needed boost.

It’s no secret that risk assets like a weaker dollar! 

But let’s put the current action into perspective before we get ahead of ourselves.

Remember, a single session doesn’t constitute a trend.

But it could mark a critical turning point…

The US Dollar Index $DXY violated a year-to-date downtrend line last week, breaking above its June pivot high:

And it did so while posting its first overbought reading (14-day RSI above 70) since its peak last fall.

This is the video recording of the August 2023 Mid-month Conference Call.

From the Desk of Ian Culley @IanCulley

The US dollar sits atop the heap.

Major global currencies, including the Australian dollar, the New Zealand dollar, the Japanese yen, the Canadian dollar, and the Singapore dollar, are limping lower against the greenback.

The long list could grow in coming sessions as momentum builds behind a sustained USD advance.

While the evidence suggests we lean in that direction, I always prepare to take the other side of a trade if and when the data changes.

So, what’s the best way to play a falling dollar?

Before I share my favorite trade setup, let’s look at the US Dollar Index $DXY: 

DXY is finding resistance at the July pivot highs and a downtrend line originating with the March peak.

We’re having loads of fun with What the FICC?

Spencer and I talk about high-level intermarket trends, whatever markets catch our attention, and things that fly under the average investor’s radar.

Bill Baruch, the founder and president of Blue Line Futures, will join us tomorrow to share his insights on trends and markets.

I’m a big fan of Bill’s and the entire team at Blue Line – a consistent source of clarity. And I know Spencer’s dying to discuss yields…

It’s going to be a good one! Be sure to tune in tomorrow at 11:30 a.m. ET.

If you missed yesterday’s show, here’s a quick recap…

From the Desk of Ian Culley @IanCulley

When it rains, it pours.

Markets chop sideways most of the time. This has been the reality for forex markets for much of the year.

But that’s starting to change as numerous US dollar pairs reach new 10-month highs. The dollar is taking down crucial levels while the US Dollar Index $DXY retests a year-to-date downtrend line and key former highs.

The peculiar coincidence sets up some potentially critical resolutions for these USD pairs.

If they fail, the dollar rally is likely over. 

If they hold and additional USD breakouts materialize, selling pressure will intensify for many risk assets.

As of today, quite a few forex pairs are on the verge of supporting a sustained US dollar rally…

Let’s start with the second largest component of the DXY (13.6%), the US dollar-Japanese yen:

From the Desk of Ian Culley @IanCulley

We have the smartest clients!

We might not always agree on the market direction at All Star Charts, but we all share that sentiment. 

Our readers ask the best questions. And I selfishly benefit every time as it forces me to clarify my thoughts into a coherent response.

As I answered an email last night, I realized I had to share it with everyone:

We're almost half way through the 3rd quarter already!

Boy does time fly when you're having fun.

Have you noticed how much different the 2nd half of the year looks compared to the first half?

We're thrilled to see it.

Owning Tech stocks stuck below overhead supply is no way to go through life.

Here is the Market-cap Weighted Technology Index failing miserably to break out above its former cycle peak.

And, of course, the Equally-weighted Technology Index failing altogether to even retest its former highs:

From the Desk of Ian Culley @IanCulley

The US Dollar Index $DXY is the most important chart in the world, again.

But, honestly, when is it not?

There’s no hiding from King Dollar.

It’s true: Currencies are not considered one of the three major asset classes (bonds, stocks, and commodities).

Nevertheless, fluctuations in the US dollar impact every asset worldwide – especially stocks and commodities. 

And the probability of renewed headwinds for risk assets is increasing as the failed breakdown in the dollar could have legs…

Check out the triple-pane chart of the DXY, our G-10 currency index, and the US dollar advance-decline line:

We held our August Monthly Strategy Session Wednesday night. Premium Members can access and rewatch it here.

Non-members can get a quick recap of the call simply by reading this post each month.

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.