From the Desk of Ian Culley @IanCulley

It doesn’t matter which way you slice it. The current market environment is a US dollar story.

Whether you’re talking about stocks or commodities, a rally in risk assets isn’t happening against a rising dollar.

It’s that simple.

You probably think I say the same thing every week. That’s because I do.

Of course, I throw in a well-defined trade setup here and there, but always within the context of the dollar and its impact on the major asset classes.

It’s that important. 

As the US Dollar Index rally is well underway, it’s interesting some individual USD crosses are finding resistance at historical levels of interest to both the currencies involved and risk assets!

Here’s a chart of the US dollar/Swedish krona cross zoomed out to the late 1990s: 

...

This is the video recording of our August 1st Monthly Charts Live Strategy Session

Here's your chart of the day.

How can it not be?

It's the answer to the question: "What's it going to take for Bitcoin and Crypto to start doing well again?"

You see this inverse correlation?

From the Desk of Ian Culley @IanCulley

Anyone can enter a trade. It’s easy. 

But before you step up to the line to place your bet, you must have a plan – a set of rules rooted in risk management to guide you through your trade.

There’s no way to enter and manage a trade if you don’t know where you’re right, where you’re wrong, and where you’re taking profits. Without a plan, your strategy and philosophical approach to the markets don’t matter. 

That brings us to the British pound.

Here’s a chart of the GBP/USD cross:

A few weeks ago, we outlined a short setup in the GBP/USD pair. The pound was breaking down to levels associated with the Brexit sell-off, and we wanted to ride that trend lower.

Around the same time, the EUR/USD reached parity, as the US Dollar Index $DXY hit its highest level since November 2002. "Long dollar, short everything else" was the trade.  

But now that the GBP/USD is back above our risk level around 1.2025, we can’t...

This to me is the big one.

The chart below is the one I'm watching the closest.

You guys have been hearing me pound the table about the US Dollar and what a hard time stocks and crypto will (continue to) have in a stronger Dollar environment.

So here you have it. This is the Emerging Markets ETF $CEW back to the same level where it bottomed out the only 2 other times it was ever down here:

From the desk of Steve Strazza @Sstrazza

Monday night we held our July Mid-Month Conference Call, which ASC Premium Members can review here.

In this post, we’ll summarize the call 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 our ASC Research Q3 2022 Playbook.

Investors have a lot of questions right now. With sentiment and at some of the most pessimistic levels in history, what will it take for some of these trends to change in the second half of the year? I believe some major trends are already changing.

The Playbook takes a step back and looks at things from a more Structural perspective. If you're specifically looking for more tactical opportunities, you can check out this week's Live Mid-Month Conference Call.

Here's what we'll be discussing in our Q3 Playbook:

• Stocks (International & U.S.)
• U.S. Sectors & Industries
• Market Breadth & Sentiment
• Commodities
• Currencies
• Intermarket Analysis
• Cryptocurrencies
• New Trade Ideas
• Overall Strategy

From the Desk of Ian Culley @IanCulley

The US dollar and interest rates are still two of the most important charts out there. You’re probably tired of hearing it, but their future direction impacts the entire marketplace.

And, believe it or not, the currency market provides a great read on both.

Bullish data points continue to roll in left and right, supporting dollar strength. From the Korean won and Singaporean dollar to the euro and the pound, the dollar seems to break out against another currency every few days. 

No matter where we look, the US dollar is dominating. 

When we evaluate the trends in emerging market commodity currencies, it reveals insight into the recent rise in interest rates. Instead of showing strength, these currencies are catching lower -- which doesn’t jibe with a rising rate environment.

Let’s take a look.

Here’s an overlay chart of the US 10-year yield and our Emerging...

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

We discussed:

• 34 Straight Weeks Of More New Lows Than New Highs
• Strong Negative Correlation between Stocks & Dollars
• DJIA & DJTA holding short-term support so far
• S&P500 Remains Below overhead supply
• Small-caps & Financials testing significant support levels
• Europe's STOXX 600 back to 2000/2007 highs
• Apple hits new All-time Relative Highs
• US 10yr & 30yr Yields run into 2018 highs
• Breakevens & EW Commodities peaked months ago before Yields
• Still no expansion in the new 20 day highs or 63 highs lists
• Commercial Hedgers remain historically long Crude Oil
• Gold, Silver & Gold Miners break down to new 52-week lows
• 10yr Minus 3-mo Yield Curve breaks down to follow 2s-10s
• Bitcoin & Ethereum hold above former cycle peaks
• New Trade Ideas: Both Long & Short

Do you see what happens when the US Dollar is falling?

Stocks and Crypto go up.

This IS the catalyst.

Do you want to know what will get stocks and crypto back into bull markets?

It's not the fed, it's not the president, it certainly isn't a former president, it isn't a war or any kind of "news" event.

It's the US Dollar. Period.

"JC what's on your mind these days?"

I get asked this a lot. So it keeps me on my toes.

But it's a great exercise, even if you're not being asked regularly by colleagues and journalists.

So what is on my mind?

It's this.

It's still this.

It's the strong Dollar preventing stocks and crypto assets from rising in price: