Data &
Technology
Research
Reports
Report Solutions
Reports Library
Actionable
Strategies
Free
Resources
Simple Backtest Calculator
Simple Seasonality Calculator
The Kelly Criterion Calculator
Sentiment Geo Map
Public Research Reports
Free Webinar
Pricing
Company
About
Meet Our Team
In the News
Testimonials
Client Success Stories
Contact
Log inLoginSign up
< BACK TO ALL REPORTS

A Dollar Trend to Watch

Jason Goepfert
2021-09-08
The U.S. dollar is flirting with its long-term trend and is currently in an unfavorable cyclical and seasonal window.

When it comes to the U.S. dollar, too often, the "cycle" goes something like this:

Step #1. In the financial news, the conflicting stories typically fall into one of two categories:

  • Those that argue that inflation and debt mean the dollar is doomed to decline
  • Those that argue that the Fed will ultimately have to raise interest rates and that higher rates will make the U.S. dollar more attractive relative to other currencies, thus the dollar is destined to rise

Step #2. The average investor weighs these two conflicting theories and decides which they feel is the better argument.

For better or worse, I prefer to look at things I can quantify.

The chart below (courtesy of ProfitSource) displays the U.S. Dollar Index along with its 52-week exponential moving average.  

US dollar trend

In general, if the U.S. dollar is above its 52-week EMA and above support/resistance near 88.80, this is favorable for the dollar.

The dollar has tended to move in four-year swings. Once again, we are not talking about picking tops and bottoms with uncanny accuracy. We are merely trying to gain an edge by paying attention to long-term cycles. 

With those caveats in mind, the chart below displays the cumulative % price performance for the U.S. dollar ONLY during those times since 1969 when the dollar was below its 52-week EMA and it was within the 4-year "unfavorable" portion of the 8-year cycle.

It is always possible that the cycle will prove the exception to the rule and that the U.S. dollar may advance significantly. The important thing to note is that it will have to swim upstream of these historical trends to do so.


What else we're looking at

  • More details on the dollar's trend, cycles, and upcoming seasonal window
  • An update on absolute and relative trends in industry, sector, and country ETFs
Stat box

The SPY fund, tracking the S&P 500, enjoyed an inflow of more than $4.6 billion on Tuesday. That's the 7th-largest single-day inflow to the fund in the past 3 years.

Etcetera

A yen for Japanese shares. Investors have rushed into stocks listed in Japan, pushing the McClellan Oscillator - a measure of breadth momentum - to one of its highest levels in 20 years.

nikkei 225 mcclellan oscillator

Bullish on bios. The Social Sentiment score for the IBB Biotech fund has neared a record low over the past 5 sessions. This is calculated like a put/call ratio, so the lower the score, the more bullish messages have been posted on social media.

ibb biotech twitter sentiment social score

Scooping up SPY. Shares outstanding in the most important ETF in the world, tracking the S&P 500 index, have soared in recent weeks. While some of that could be creations to meet the demand of short-sellers, when it occurs with a rising market, it's more likely that buyers are eager.

spy shares outstanding

DATA &
TECHnologies
IndicatorEdge
‍
BackTestEdge
‍
Other Tools
‍
DataEdge API
RESEARCH
reports
Research Solution
‍
Reports Library
‍
actionable
Strategies
Trading Strategies
‍
Smart Stock Scanner
‍
FREE
RESOUrCES
Simple Backtest
Calculator
Simple Seasonality
Calculator
The Kelly Criterion
Calculator
Sentiment Geo Map
‍
Public Research Reports
‍
Free Webinar
COMPANY
‍
About
‍
Meet our Team
‍
In the News
‍
Testimonials
‍
Client Success Stories
Pricing
Bundle pricing
‍
Announcements
‍
FAQ
© 2024 Sundial Capital Research Inc. All rights reserved.
Setsail Marketing
TermsPrivacyAffiliate Program
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

Testimonial Disclosure: Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.