One of the main things that has deterred me from calling a market “bottom” is the US dollar index.
As the US dollar index continues to grind higher, it typically puts a halt on the majority of commodity prices and weakens the broader markets.
This is what’s happened over the past year or so…
Now, the dollar has posted yet another buy signal recently, which tells me that there’s an 80%-92% chance, statistically, that it goes higher from here.
In other words, if the dollar goes higher, the market likely goes lower.
I’m a big fan of playing the odds, hence me hesitating to state the “bottom is in”.
The majority of my positions remain on the short side, both in my personal accounts and in my Traders Agency premium services.
After all, that is the identifiable trend from what I see in the market at this point in time.
The Technical Setup
So you can see what I’m talking about, let’s take a look at the US dollar index and break it down on a technical basis.
Since May of 2021, the dollar index began placing higher highs and higher lows, developing the trend defined by the orange structures drawn on the chart.
Price action hesitated at both the blue and teal long-term channel structures, which complemented our analysis very nicely.
You can see there was a hesitation at these structures followed by some consolidation.
Then, finally, there was an identifiable breakout.
Well, that’s exactly what we experienced just a few weeks back as price again broke out.
Price settled on a weekly basis more than 1%+ above both the teal and orange structures, prompting this most recent buy signal.
My Market Specialty
Now, I’m not much of a US Dollar Index trader… But I am a commodity trader, and I’d like to think a half decent one at that.
So, when I see this happening, what am I looking for?
I’m looking for selling or shorting opportunities in the commodity field of assets.
Particularly speaking, I’m laser focused on navigating one specific market that I’ve traded now for over a decade.
That market is the WTI light sweet crude market.
And lucky for you, I host an educational trading service called The Speciale Report where I teach my students all about this sector and, more importantly, how I navigate it.
I’ve captured some substantial moves over the years, awarding me six-figure returns in just a matter of weeks.
I can’t say for sure when or if that’ll happen again, but we can sure do our best to identify those possibilities as they develop.
We also gather every Wednesday from 2-3 p.m. ET, to look at this market and the broader markets too as I help my students sharpen their trading skills.
Rules to Live By
“Fairy tales are more than true: not because they tell us that dragons exist, but because they tell us that dragons can be beaten.” Neil Gaiman
Until next time, I wish you a beautiful and blessed day!
Yours In Trading Success,
Anthony Speciale Jr.