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Matt McCracken

Matt McCracken

Matt McCracken is the founder of McCracken & Company (MAC). The MAC is a financial advisor based in Dallas, TX offering asset management to individuals…

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USD Has a Really Bad Week - Immediately After CNBC Issues a Buy on It

On 10/26/16, CNBC posted a story on the "Golden Cross" taking place in the USD and how it was a sure bet the currency was set to continue appreciating. I posted a contrarian piece which you can read here stating that the all-powerful indicator was a terrible hoax going 0 - 3 in the past year. Now make that 0 - 4.

Now CNBC posts this article about how the USD just experienced its "worst week in 12". Obviously, with no apologies for their atrocious call made just the week prior. Even more proof Wall Street uses these shysters for their pump-and-dump schemes. The story appeared on CNBC the day after the recent, multi-month high in the USD. Timing could not have been worse.

The USD was carving out a parabolic curve. Parabolic curves can defy gravity for a long, long time but eventually they give up. In this case, it gave up fairly easily. As you can see on the chart, the USD has fallen and fallen hard this week. I suspect it will gain some traction near one of the major moving averages which we know are close to each other because they just crossed over one another. The 200 day moving average is still declining which is bearish. If the 50 day rolls over, then they will be in "bearish alignment" but that will likely not take place for a bit.

Our investment thesis is the entire FED bubble, which has pushed both equity and bond prices to unreasonable levels, will not be busted until something happens in the currency markets to devalue the USD. We believe the relative value of the USD compared to other currencies is the most important indicator to be watched.

 

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