Dollar Nearing Bear Market Recognition Moment

The dollar is getting closer and closer to that recognition moment when the market realizes that a bear market has begun. It’s now making lower highs and lower lows. The next step will be to break the intermediate uptrend line. After that will come a break of support at 92. That should usher in some kind of waterfall event as all the trapped longs finally understand that the fundamentals are not bullish for the US Dollar. After printing literally trillions of them over the last 6 years I have no idea how anyone could – with a straight face – say the fundamentals are bullish. There has to be consequences to the Fed’s insane QE programs.

recognition moment
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  1. s29

    So this could be bearish for European indicies? Looks like the DAX is reacting to the stronger Euro.

  2. epalazzo

    Not to mention the SDR reset that happens on October 1, depreciating the USD (lowering its rate in the basket) and the rumors about SDR as a new reserve currency.

    1. s29

      I agree with Gary in the shorter term, especially when the US election uncertainty will gain traction. Trump is now far behind, Wall Street now thinks there’s an 88% chance of a Clinton-presidency, but there are a whole lot of game changers that can happen in the coming months (I wonder how low-stamina Clinton will do in the important debates).

  3. Alexandru Popovici

    closed my long-treasuries position opened yesterday; I dont like how treasuries react –> they need to complete their ongoing daily cycle.
    I will resume my long-treasuries swing trade most likely tomorrow.

  4. fb7777

    I appreciate your write-up. It looks like next week will be do or die for the US$. I for one still think it will be the currency of last resort in this world before all currencies crash. Let’s wait and see what happens next week.

  5. Don

    Alexandru: Are you aware that Dennis Gartman is now bearish on bonds? Given that he is almost always wrong, his bearishness is very bad news for the bears.

  6. chrisG

    Gary, often market drop big post election so that incumbent could get reelected. What do u think?

    1. Gary Post author

      The markets will be due for an ICL later this fall, but make no mistake, the 7 YCL is behind us and we are now beginning the bubble phase of this bull market.

      All those trillions and trillions of currency units are going to cause another series of bubbles.

  7. humbled

    hi fb7777, read this piece before. Rambus same directional view on the dollar, not a different view…

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