The US dollar index (DXY) is dropping toward the 50% Fib retrace level
Reference yesterday’s post on USD. The next support (not visible on the daily chart) coincides with a 50% Fibonacci pullback of the entire rally, which negatively diverged the inflation trades as we had noted all along the uptrend. The next marker is the 62% Fib, which coincides with a visible support shelf at 99.
I cannot predict the future (or at least, unlike guruesque charlatans far and wide, I won’t try to), but I can tell you that 2023 is not likely to see normal outcomes like deflationary pressure = strong USD.
Okay Garth? Wayne? Party on boys. The anti-market is in trouble.
For “best of breed” top down analysis of all major markets, subscribe to NFTRH Premium, which includes an in-depth weekly market report, detailed market updates and NFTRH+ dynamic updates and chart/trade setup ideas. Subscribe by Credit Card or PayPal using a link on the right sidebar (if using a mobile device you may need to scroll down) or see all options and more info. Keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar. Follow via Twitter@NFTRHgt.
Hi Gary. I own some dollar index futures as a hedge against long positions. I also have a short position in XHB and SPX. Are you suggesting that stock shorts are a better hedge than US dollars?
No, not at all Bart. The best hedge to me has been cash paying out interest. As for the futures, I would not make that bet at this time as a hedge because I am not feeling good about Uncle Buck’s ability to perform his normal role as liquidity receiver simply because he rallied so strongly in negative divergence to the inflation trades already.
In short, I’d rather hold a lot of interest bearing cash, continue to focus on gold related items and take potshot shorts at the stock market here and there. But only as a hedge, due to my psych profile that does not allow me to be a gung ho bear.
Much appreciated Gary – points well taken. In shorting your profit tends to come all at once, which means a lot of nerve-racking waiting and time to second guess yourself:) You need the right mindset for that, yes. I am not great in it either. So I only hedge. Let’s see what happens tomorrow. Two big days in row.