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 transition.

Comments

The US dollar, a trend in triple upside alignment for 6 days, has outperformed most assets. This includes FANG and bitcoin (cryptos), yet few even recognize it. This includes the Trump Administration which is certainly underestimating the strength of the coming rally and their ability to control it. The trade war must end as the hubris being displayed over the invisible hand will end in tears for Americans, countries, and possibly the global economy. Raising tariffs on Turkish exports as the economy enters hyperinflation shows a lack of understanding of the crisis unfolding.

Watch DI (chart). It’s falling fast. The lower the number goes below -60%, the greater the bearish imbalance across the major players in the futures & options market. While extremely low DI numbers don’t always reverse trends, they can shakeout weak hands over the short-term. This hold true as DI pushes toward -100%, an outcome almost never observed.

USD Chart