Why Do So Many Continue To Fight The US$ Bull
Trader Scott’s Market Blog
October 25, 2016
The US$ is in a bull market. This whole rally from the March 2008 lows, people have been fighting it and endlessly predicting a top in the $. The Dollar had a very large area of ACCUMULATION which is “why” it is now rallying and in an UPTREND. There are plenty of fundamental “reasons” for the $ to be rallying. And when I give them, I hear from many folks who tell me I’m nuts – and the $ is showing a big topping chart pattern. First of all, I don’t even understand “chart patterns”. And secondly, maybe I’m wrong about the $. But I don’t care what people tell me, I just care what my work “tells” me. And as I’ve written numerous times – Jan. 2015. I own a lot of US$ and I’m bullish on the $into next year. Then we’ll take another look, if the rally persists. And I do expect central banks (CBs) to continue to fight the rally in the $. One of their tools will continue to be the selling of US Treasuries, which will continue to add supply to the Government Bond market, even global Government Bonds. And there are some “well-respected”, really smart folks out there (admittedly much smarter than I am) who have no faith in the CBs to achieve the outcomes which they (the CBs) “claim” they desire. I agree. But then these “well-respected” people, a couple of guys in particular, go on to proclaim that the CBs have all of the tools necessary to cause the $ to plummet (and, of course, then gold will soar). In other words, they have no faith in CBs, yet the CBs can easily stop the $ bull market. These “well-respected” guys are in the media all of the time, so why doesn’t anyone point out the absurdity of their claim?
But presently, as I said here,the $ is currently having to deal with an interim RESISTANCE area(red arrow). But I do expect a rally and an eventual retest of the resistance area around 100.50 on the index (at a minimum). This recent area is also an interim SUPPORT level on the Euro (Brexit lows). And we are going to continue to see currency after currency go to new multi-year and even multi-decade lows against the $, like the British Pound and the Chinese Yuan. And lastly, to repeat, for people who don’t believe that gold and the $ can move higher together, wait to see what happens when the European and Japanese banks blow up.
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.