Tackle Today: The Global Dollar Cycle
September 9, 2022
«Bulls to the buck: stop rising, please.»
Wednesday’s Tackle Today focused on the dollar’s flexing and how it was trampling risk assets. Let’s pick up on that theme. I came across a paper on “The Global Dollar Cycle” that provides a deep dive into why a strong dollar can be so painful (see here). Here’s the money quote:
“This paper documents that dollar appreciation shocks predict economic downturns in emerging and developing economies… The dollar has strengthened considerably since mid-2021, and a contractionary phase of the global financial cycle is now underway.”The Global Dollar Cycle
Remember, you can track the movements of the dollar using the ETF UUP or a currency pair such as EUR/USD on ThinkorSwim. This year the dollar has played an important role in pointing the way for stocks. A strong inverse correlation has developed where dollar up = stocks down.
As I type, the dollar is dropping for its third day in a row. Guess who has gone up for three straight days? Stocks. If you’re a bull, root for the dollar to end its rocket ship ride.
Video Of The Day: Gino’s Gems – What is the CME FedWatch Tool and how to use it. #tradinghacks
In today’s Gino’s Gems, Coach Gino Poore explains what the #CME #FedWatch Tool is and how to use it.
Chart of the Day: Dollar History
The chart shows the dollar’s price history. Past crises caused by its ascent are highlighted.
Options Theory Blog
Managing the Market Bounce
Today’s video shows me walking through how I’m analyzing and managing a handful of my trading lab practice positions. You’ll see me discuss naked puts on DIS and IWM, bear puts on IWM, and bull puts on SPY.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cash Flow Club Replay
If you missed last night’s webinar with Coach Greg Holmes where he talked about Dynamic Calendars or would like to watch it again, check it out here.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.