People get so angry when I tell them that Energy stocks haven't even broken out yet...

The historic outperformance in Energy over the past 2 years is just the pregame.

The real party hasn't even gotten started.

The DJ is still setting up....

We haven't even mixed the jungle juice.

Take a look at the Energy Sector Index still stuck below those 2008 highs. And its largest component Exxon Mobil (23.7% weighting) below those same levels:

You see what just a little bit of Dollar weakness does to this market?

I'm telling you. I'm not making this up.

Now here's the thing. Let's remember that extreme volatility IN BOTH DIRECTIONS is commonly found near turning points.

Last time the US Dollar Index had a single day GAIN as large as Friday's was 3/19/20.

Last time the US Dollar Index had a single day LOSS as large as Wednesday's was 3/26/20.

The Dollar Index peaked on 3/20/20. Stocks bottomed the very next trading day on 3/23/20.

Here's a look:

Here we are back to the June lows in both the S&P500 and Nasdaq100.

Support held for a few days this week at the same prices that it held 3 months ago:

The math has been simple.

When the Dollar is doing well, stocks don't.

And when the Dollar is weakening, stocks are strong.

It's been made very clear to us all.

The US Dollar is the enforcer:

Markets trade in cycles.

We've seen these cycles play out over and over again throughout many decades.

But how do we profit from it all?

Well, for me, I like to use seasonal tendencies to help put the current market environment into context.

It's not about today and tomorrow, and it's not about next year. Where are we right now?

Our Cycle Composite does a good job of helping us put together a road map for this market's cycle.

On the left side of this chart we have the 2021 seasonal trends and on the right we have the 2022 trends.

Last year's composite includes every year since 1950, every post election year since 1950 and every year ending in 1, to include the decennial cycle. Look how closely last year's actual results mirrored the composite:

Great weekend of Charts and Football for me!

How about you?

More Charts than Football? Or the other way around?

I definitely got a healthy dose of both.

And this one for me definitely stands out.

The way I learned it from Ralph Acampora many years ago was, "DON'T FIGHT PAPA DOW"

So here's the Papa Dow he was referring to. I included the key levels we've been focused on since the 2018 correction. They've really helped and I think they continue to.

But for today, let's focus on the fact that prices are both below overhead supply and above support from the summer lows.

From any sort of intermediate-term perspective, this is what we call "No Man's Land":

Here's something you don't see every day.

Silver showing a bullish divergence?

How could this not be the chart of the day?

Gold is making new multi-year lows this week, but Silver is pushing higher.

In fact, despite the recent pressure in Gold prices, Silver is going out at the highest weekly close since early August:

You know how I know we've been in a bear market?

Because investors got hammered. And not just in 2022, but over the past year and half.

But specifically, look at the average household over the past 2 quarters. They're seeing record losses:

Have you noticed that stocks aren't getting oversold?

So not only did the new lows list go quiet, since peaking almost 3 months ago, but stocks aren't even seeing oversold readings.

The sellers appear to be exhausted.

We define oversold conditions as a 14-day RSI below 30. It's incredibly informative.

If you think a stock is in an uptrend and it's hitting oversold conditions, then it's probably time to reevaluate that thesis.

In uptrends you see overbought readings (RSI >70), and more importantly, a lack of oversold readings.

Look at the S&P500 not getting oversold at all during the Spring and Summer months:

You've heard me say it a million times by now.

It's going to be really difficult to make money long most stocks or crypto the rest of the year if the US Dollar remains strong.

Check out last night's video about what we're doing about it.

We got just a little bit of Dollar weakness starting in mid-July and stocks ripped higher. Thousands of points added to the Dow, Ethereum doubled and the average stock on the Nasdaq rallied over 40%.

We saw one of the most historic short-squeezes in history. And all it took was just a little bit of Dollar weakness. It wasn't even that much.

But then once that Dollar strength came back last month, the bid in stocks and crypto disappeared.

Here's a zoomed out look at the negative correlation between stocks and the Dollar:

Remember when the stock market peaked in February 2021?

That's when the New highs list peaked. That's when the Nasdaq Advance-Decline line peaked. That's when Chinese Internet Peaked. That's when Biotech peaked. That's when all the ARKK funds peaked.

February 2021 is when everyone had a SPAC.

Remember SPACs?

This group of "Special Purpose Acquisition Companies" was a poster-child for the excess environment of Q1 2021.

These SPACs were the biggest pieces of hot garbage on the market. And everyone wanted them.

And then the market peaked and their prices came tumbling down.

Now here we are, 18-months later. And they've just decided to delist the SPAC ETF $SPAK.

A sign of the times?

There's one major catalyst that can be a wrecking ball in a potential bull market for stocks.

What's going to stop a year-end rally?

I think if there's anything that can stop it, it's further strength in the US Dollar.

This summer, the markets have only reiterated the negative correlation between stocks and the US Dollar.

A little bit of dollar weakness over the past 6 weeks, or lack of progress to be more accurate, sparked a rally in stocks and crypto assets.

But as Dollar strength came back recently, the pressure on stocks and crypto has returned.

So let's take a closer look.