24 January 2024 - Thoughts on the Market

In my last write-up, I wrote that I expected the dollar to likely come under a renewed attack once the recent corrective cycle was complete. My hunch is that the renewed attack is very imminent. I have sold dollar Swiss and dollar yen today, and I also sold a basket of Canadian dollars, euros, and pounds against the yen and Swiss franc. Why? Let me walk you through my thought process. You might find it to be helpful – either as something to consider in your own analysis, or alternatively as something to avoid. Either way, there is definitely a method to my madness, even though my madness sadly leads to wrong decisions quite a bit.

First of all, if you go back and check the hourly charts, nearly every rally in the dollar since the start of the year took place during New York hours. The pattern has been very clear. New York speculators would aggressively buy the dollar – dollar Swiss and dollar yen in particular – from early morning all the way into the close. Tokyo would knock the dollar down a bit, and then London would bring the dollar back towards the prior day’s closing levels before New York would come in and take the dollar up again to ever-higher levels.