Scott thinks THIS is the only chart that matters right now. $UUP – May 11, 2022UUP
This is Scott with your Chart of the Day. I am only going to show you one chart because it is really the only chart you really need to care about right now in these market conditions, and it is the US dollar.
Now, on TC2000, my charting platform here, it brings up UUP ( NYSEARCA: UUP ). Maybe on your chart, something like TradingView, it might bring up the DXY, pretty similar but I am going to stick with this one here just because it is on the platform, it is the US dollar. And so as you can see, the US dollar has come out of a little bit of a low here.
The US dollar had some craziness back in March of 2020 and as the Federal Reserve injected liquidity into the market the value of that US dollar dropped. And then when we started to see things kind of creep up here, prices are going up, everything is becoming more expensive, and chatter of interest rates being increased, the value of the US dollar started to creep up.
Ever since this really started to get going markets have had trouble finding a bid because the value of the dollar is going up. So they don’t need to hedge any loss of the dollar with equities or risk assets. And so this, in my opinion, is something that you need to pay attention to. Because as long as the US dollar is in a strong uptrend you are going to find pressure on risk assets and that is going to make for a hard trading environment.
So be sure and watch the US dollar. If you see this start to break down we might then see a bounce in the market. But this is definitely a chart that you should be paying attention to, especially in these market conditions.