TVC:DXY   U.S. Dollar Currency Index
DXY is technically overbought and the market seems to agree. We had a several fair chances to break out above 108 in the past week, but it did not come to fruition. Technical dollar bearish headwinds SEEM to outweigh fundamental bullish dollar tailwinds for the moment. Lately, every time the 0.5 month (100 x 4 hours = 16 days) log-returns is positive and reaches zero, the price responds with a stronger bearish reaction and reverts back to the "trendline" (personally I'm not a fan of straight lines, but there it is).

Short Dollar, long equities for a week, see what happens? This has been my plan for the past few days but it seemed foolish to publicly suggest either direction until the FED meeting, which timed with this pivot perfectly. The market was poised to easily move either direction; not a coincidence.

Parameters:
If we break above 107.5 or 108, the idea should be considered invalidated. Close the short position around 105 unless it breaks below. If it breaks below the "trendline", we have a clear symmetry violation and we should add a lot more until proven otherwise.

What do you think?

Thanks for taking a look, good luck, and don't forget to hedge your bets!
Comment: Where will it break? We are almost +2 deviations from the log linear regression mean:


Lots of short-term upward momentum, contrasted with a decent chance to return to the mean in the next few years.

Will watch support and see what happens.
Comment: Long-term cycle:

Comment: Using the bars tool, I copied the pattern from the previous portion of sub-zero 16-day log returns:


If It obeys the pattern, short equities seems like a good idea, and vice versa if it fails the pattern and goes down, long equities seems reasonable.
Comment: Quick update, something interesting I'm looking at:

When the Crypto Total market cap becomes correlated with DXY, the correlation inverts (illustrated by sunshine icons below). When it inverts it does not always mean DXY will go down and Total will go up, however DXY is very overbought and Total is technically oversold. I think Total is hinting at a rally. Whether the DXY trend will invert remains to be seen but I think it's possible to hit the near-term 50 day average(white line) in this chart which could mean we are about to become uncorrelated again, ie. DXY sideways and Total up, or remain negatively correlated but flip trends, ie. Total up/sideways and DXY down:


But I'm not sure, DXY is very tricky. Both trends could remain but I think there is a good chance for change in both Total and DXY trend in the next months.
Comment: Support broken?!
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