The US$

Trader Scott’s Market Blog

January 17, 2017

We are suddenly seeing stories galore about the end of the bull market in the US$, “because” of the comments last night from Donald Trump. The WSJ on Monday night ran a story where Mr. Trump said he was not at all pleased with the “too strong”$. Which is amusing, because the day before that on Sunday in this blog post I said:

“When I initially bought the $, Donald Trump wasn’t even on the radar screen. He didn’t have anything to do, so far, with the $ bull market, but he will certainly have something to do with the major top in the S. The bigger $ rally will cause its’ own demise. Likewise, the President-elect will not be pleased at all with a ‘too strong’ $.”

So all of the people who did not even recognize that we were at a serious resistance area in the $, (and we needed to see a correction first, to setup a move to new highs above 104) now are claiming the $ has “topped”. Over the last several weeks, I have been adamant about 3 things. The $ has way too many brand new bulls, is at a serious resistance area, and needs to sell off first, to be able to get thru that serious resistance area. The sentiment in the $ and the stock market has been, “what can possibly go wrong”. And the sentiment in bonds and gold has been, “what can possibly go right”. So this selloff in the $ is exactly what it needed to do. The high in the $ for this move was on January 3rd, as can be seen in the chart showing the support and resistance zones, and the longer term chart, showing why I was targeting 103.50.  Why this “sudden” move lower should be a shock to anyone is baffling, as my posts have been saying for weeks. The most recent one was the day before the January 3rd high:

“There is tremendous bullishness right now in the $ right as it’s sitting in a pretty big resistance zone. There is also alot of hope in the new Administration. There was alot of hope 16 years ago for the previous Republican Administration of George (Hanging Chad) Bush, but that didn’t stop the $ from putting in a major top. I would expect a similar situation early on with this President-elect. Gold will begin to “sniff out” a topping process in the $, and it will begin take pressure off of it. And there are situations coming up this year in Europe, where gold and the $ can rally together.”

People have been telling me for years that I’m wrong about the $, but this current selloff isn’t surprising, nor unexpected. Maybe this time they’ll be right, but all I can do is stick to my work. And my plan going forward is if there is a deep enough selloff in the $, then to add on. But it is no longer worth getting too aggressive about being long the $, because it’s days are now numbered. At this point it’s more of a “comfortable” place to hold liquidity. There are a couple of markets and stocks which are very interesting, and I’ve been talking about recently. So those will be a much better place to “store”cash as we move forward. It’s the Dollar’s rally which will cause its’ own demise. And over the next several years, we could be talking about the high in the $, not just a high. But getting there is the problem.

About

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.