Thursday, June 17, 2021

#Dollar Index Review $UUP $UDX

US Dollar Review

Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to long-term trends, it does not define them. The focus on short-term noise rather than trends, a source of confusion for the majority of investors, leads to the creation of bagholders at major trend transitions.

The US Dollar Index's overall trend, revealed by trends of price, leverage, and time, are defined in The Matrix for subscribers.

Subscriber Comments

Subscribers should have been fully aware of the large bullish energy build in the Major Currencies DI (US Dollar Index too) on display from the Summer to Fall of 2020 (see Major Currencies DI). The large bullish energy build, frequently discussed in reviews, was described as "it's likely not going to matter until it matters." This is a common observation for all assets in the Matrix, and a constant source of pain for the majority. The majority doesn't care about 3-9 months out until the daily price action causes significant short-term losses.

The MC DI's large bullish energy build is dissipating from its relative high, but it's not completely unwound. DI and DI2, -3% and 0%, remain relatively neutral even as the majority is beginning to realize the "dollar is dead" thesis tossed around on the Internet might be wrong. Continuation of the dollar rally, declines in commodities, gold, silver, and so on remain high probability outcomes until the MC DI and DI2 show bearish concentration. Bearish concentration could be a long duration event, so be prepared.

The unwinding of the MC DI, likely as the dollar rallies, is already influencing gold, silver, and commodities. Gold and silver's large bearish energy builds, observations seen both in the individual commodity DI and Precious Metals Composite DI, confirmed and warned us the dollar was primed to rally, and gold and silver were vulnerable. I long classified the backdrop as a "frustration phase" for gold and silver. The last Silver Review posted on 06/06/21 discussed the setup in detail and warned against assuming silver was ready for the big breakout from a long term cup and handle. Gold Reviews discuss similar concerns.

Anyone shocked by rallies in the dollar, and declines in commodities, gold, silver, and other high dollar sensitive markets hasn't done their homework. Homework for subscribers is downloading the Matrix, watching the Reviews, asking questions, and remember that resolution of setups are slow. The assumption that everything needs to happen right now is another constant source of pain for the majority.

Major Currencies Composite DI (Line 61 Trends Tab of the Matrix)

Precious Metals Composite DI (Line 61 Trends Tab of the Matrix)

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