From the Desk of Ian Culley @IanCulley

One of the most valuable tactics I’ve learned in my career is the ability to capture a strong trend as it’s trending. 

I’m not talking about FOMO buying or blindly chasing breakouts.

In my experience, buying strong trends requires patience and discipline. 

Today, exercising these two key traits is especially necessary if you're trading the explosive US dollar. 

Navigating the latter stages of the dollar rally presents challenges, particularly in dealing with heightened volatility. However, it doesn’t mean we can’t join in on this trend responsibly as it barrels down the tracks... or, in this case, up them.

A funny thing tends to happen near the end of important trends.

The journalists finally catch on.

It's never at the beginning of trends. That's not when they get excited.

It's when everyone has finally agreed that a trend is in place, which by definition, is late in the cycle.

You see, the journalist community does an amazing job of aggregating consumer & investor sentiment. I find they are the very best at this.

Stocks have been under pressure consistently since Q1 last year. That was 20 months ago.

That's precisely when the United States Dollar stopped falling and started to rise.

And this wasn't just against the Euro, which represents 58% of the Dollar Index, we saw Dollar strength across currencies from all over the world.

The US Dollar was the only safe haven asset this year. It wasn't US Treasury Bonds, it wasn't Japanese Yen and it certainly was not Gold.

The only safe haven was the US Dollar.

From the Desk of Ian Culley @IanCulley

The US dollar has been under pressure for the past five days, and investors are dancing in the streets.    

I get it. A weaker dollar sits at the top of every stock market bull’s wish list. When the dollar goes down, stocks tend to go up. But don’t forget – betting against the dollar has only brought pain this year.

So, instead of joining the celebrations, I nailed down a clear-cut strategy for selling dollar weakness. 

Spoiler Alert: Early sell signals are already starting to fire!

From a seasonality standpoint, this is where you buy stocks.

Sentiment is near wash out levels. Who was left to sell?

Today on BNN Bloomberg I was asked about why we were buying stocks.

I think it adds some value to talk about the risk management procedures as well. And also which stocks we want to be buying.

Here's the full clip:

This is the video recording of our October 3rd Monthly Charts Live Strategy Session

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:

From the Desk of Ian Culley @IanCulley

The calls for a dollar top are growing louder as analysts claim the advance is overextended. 

They’re right. But pushing further into overbought territory is exactly what parabolic rallies do. And many of the technical tools supporting the thesis that the dollar is topping do not apply. 

In practice, mean reversion tools such as oversold/overbought conditions, price exceeding the upper bounds of a Bollinger Band, or the percentage gain above the moving average du jour are best used in trendless markets. 

Does the dollar look trendless? Absolutely not! 

Don’t let these data points distract you. Let’s instead put the current DXY advance into perspective by focusing on historical price action. 

Tuesday night we held our September Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each

Let’s get right into it!

This is the video recording of the September 2022 Mid-month Conference Call.

We discussed:

• What's the Bear Case?
• One of worst starts to year for 60/40 portfolio in history
• The impact of the US Dollar on Stocks
• No lows list peaked 3 months ago
• Best time to buy stocks in the 4 year cycle
• Bearish sentiment persists
• ARKK and Biotech stopped falling in May
• S&P500 stuck below resistance 4100-4200
• European Banks show relative strength
• Midstream Stocks Breaking out - the full list
• Corn, Soybeans and Wheat with huge bases
• Silver bullish divergence vs Gold
• Other Emerging Markets outpacing China
• Small-cap Industrials stocks that are breaking out
• 1-yr yield highest roc in 40 years
• The Flippening Is Real
• List of best trade ideas