Another 48h - Monster PPI With +3.3 But DXY Bearish Today

2025/01/14
Another 48h - Monster PPI With +3.3 But DXY Bearish Today
“the last time dxy was over 110 in 2022 and/or 2002!
what does this play in historical context? today?”



110.176 : 2025/01/13 - todays new 2025 high
109.966 : 2025/01/02 - last annual high 2025
109.533 : 2025/01/02 - 1st annual high 2025
109.413 : 2025/01/14 - last price action
109.206 : 2025/01/03 - 1st high after 1st high 2025
108.583 : 2024/12/31 - annual high 2024
107.587 : 2024/12/20 - last low of 2024
107.348 : 2023/10/03 - annual high 2023
105.441 : 2024/11/06 - trump re-election day high
The first two highs of this year 2025 should be paid attention to - 109.533 points from 2025/01/02 and/or 109.206 from 2025/01/03. Because, if these are defended, it confirms the assumption that traders and/or investors want the DXY higher. But even a price action below that - even up to the annual high of 2024, from the last day of the year, on 12/31/2024 at 108.583 points, is not bad in the big picture. Like 107.587 points, from the 2024/12/20 (last low of 2024) and/or even 107.348 points, from the 2023/10/03 (annual high 2023) too. Yes, it may even make more sense in the long run - in a historical context. that the DXY fall bearish down around this price action area. Then recover and/or continue to rise. Because the big picture in the historical context is the price action above 110 points and more. Because this was last left bearish downwards in June 2002 - before the Iraq war. And/Or also traded briefly bullishly for the first time in 2 decades in September 2022 - before the Ukraine War. The main cause of the US's problem - its costly war adventures! Which not only costs human lives - but also makes the majority of domestic US Americans (taxpayers and/or consumers) financially materially poorer. Due to the accumulated US budget deficit and/or also the US foreign trade balance. But to come back to today? The chart looks bullish!

"The US annual core producer inflation was at 3.5% in December of 2024, remaining unchanged from the upwardly revised value from the previous month, to mark the sharpest increase since February 2023. Still, it was below market expectations of 3.8%." reported today the U.S. Bureau of Labor Statistics. And/Or also "The US annual core producer inflation was at 3.5% in December of 2024, remaining unchanged from the upwardly revised value from the previous month, to mark the sharpest increase since February 2023. Still, it was below market expectations of 3.8 %." Sure - [url=]"PPI shows wholesale inflation increased less than expected in December"[url=]Text was the headline from our colleagues at yahoo!finance. But if you let the matter melt in your mouth - click on it and look at the development of the PPI for 2024 - then it will quickly become clear! What? That tastes bitter (+3.3%)! Because the high prices put pressure on the paid employees who produce them, i.e. cost pressure for employees, as well as on inflation itself, because the manufacturing industry, let alone the trade, also wants to earn something from the value chain. Which is why I'm a little surprised by the negative reaction of the DXY - but the bullish price action of the last few weeks, months, since the end of September 2024, should explain a lot! Even if bullish economic data - like from the textbook was published! Sure - at some point even the best bodybuilder gets tired - even the best salesman behind the counter can't do it anymore. Even if many around him still want it more, and more, and more! What do I mean by that? Wall Street's reaction. All stock markets DJIA SP500 NDX and/or beyond also the magnificent 7 GOOG AMZN AAPL MSFT META NVDA TSLA in the thick green area! Sorry - without me. Even though no one has ever called me a bear. Just because I perceive some stock markets, let alone stocks, to be too expensive. Really now? Yes! Your freedom-loving conservative - I wouldn't preserve anything on the stock market at this price level. Therefore no long 4XSetUps. But I tend to remain bullish on DXY ! How long? Wait for US inflation data tomorrow...

“The anti-resource curse initiative has stronger legs than most and that has made me very enthusiastic.”
George Soros

The U.S. economy is the undisputed powerhouse of them all - when it comes to the stock markets (all around the world). Nothing shows it better than the $170 trillion net worth of the U.S. private sector, and the fact that the market capitalization of U.S. equities is greater than the sum of all other global equity markets' market cap worldwide. Scott Grannis impressively analyzed this at the beginning of December 2024 already. And published on his blog: "The U.S. is the King of Net Worth" And confirms my assumption that it is currently best to stay out of the US stock market. And in the conservative dynamic trading account only stay long in US01Y (fixed-interest security from 2024/03/04) and/or also UKOIL (how? as you see below)! Because the stock market is historically simply too expensive - which is also shown by the S&P 500 Mean Reversion Model. Because in this case, the broad US stock market is not just overbought. No - even Strongly Overvalued! "As of September 30, 2024, the S&P500 is currently trading 71% above its modern-era historical trend value, (about 2.0 standard deviations), indicating that the market is Strongly Overvalued."


With best wishes
and good intentions:
Aaron



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