According to some the stock market cannot rally until the Buck cools off. Don’t look for a stock market bottom until a soaring dollar cools down. Here’s why.
What a bunch of nonsense. Sure, any market bounce/rally will likely coincide with the DXY selling off, but there is very little long-term correlation between the overall market and the USD. Just look at the chart above.
Speaking off, we have been following the chart above for years. There are two points of interest on the chart. The first circle in 2019 is when the market crossed an extremely important support/resistance line, line that most people are not aware of, clearly suggesting a long-term rally was coming.
The second hit on the line occurred in 2021 when this same line acted as support. I remember it very well. At that time the Dollar bears and Gold/Bitcoin enthusiasts proclaimed, once again, the dollar was about to collapse to near zero while everything else would soar. At this very same time we were looking for a bottom.
As you can see from the chart above, the DXY doesn’t have must of a resistance until it hits 120 levels. Now, we are not saying it would happen overnight, but those betting on the Dollar’s demise might want to re-consider. At least for the time being.
We will be publishing our updated dollar TIME/PRICE analysis in a matter of weeks. If you would be interested in seeing it in full, please Click Here