{"id":22413,"date":"2025-01-15T07:30:57","date_gmt":"2025-01-15T12:30:57","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=22413"},"modified":"2025-02-20T14:01:43","modified_gmt":"2025-02-20T14:01:43","slug":"aggressive-traders-can-short-the-buck-here","status":"publish","type":"post","link":"https:\/\/stage.jeffclarktrader.com\/market-minute\/aggressive-traders-can-short-the-buck-here\/","title":{"rendered":"Aggressive Traders Can Short the Buck Here"},"content":{"rendered":"

I was wrong.<\/p>\n

Three months ago I told readers<\/a> the rally in the US dollar was just about over. The buck was overbought. Technical conditions were stretched quite far to the upside. It seemed to me there wasn’t a lot of fuel left to propel the dollar much higher.<\/p>\n

So, for folks who had bet on a dollar rally in September based on the bullish setup I wrote about back then, I suggested taking profits on that trade.<\/p>\n

Since then, the US dollar index has rallied 5%. It closed recently at its highest level in 2.5 years. The “buy-the-buck” trade would have been even more profitable.<\/p>\n

We left some money on the table.<\/p>\n

But, at least I didn’t recommend shorting the dollar – which would be a losing position right now. I was tempted – to be sure. The buck was overbought. Conditions were stretched. And, I didn’t think there was much upside left.<\/p>\n

But, the dollar’s setup in October lacked one of the key conditions I look for before making a short trade…<\/p>\n

Negative Divergence Is Key<\/h2>\n

It lacked negative divergence. The various momentum indicators I follow were moving higher right along with the dollar, which confirmed <\/em>the rally.<\/p>\n

And, while any further upside seemed limited to me, the lack of negative divergence suggested the dollar wasn’t ready to reverse right away.<\/p>\n

Today, though, we have a different story. Look at this updated chart of the dollar index…<\/p>\n

\"chart\"<\/p>\n

(Click here to expand image)<\/a><\/p>\n

As the dollar index has been making higher-highs over the past two months, the momentum indicators at the bottom of the chart have been making lower-highs. This sort of “negative divergence” is often an early warning sign of a reversal to the downside.<\/p>\n

The dollar is overbought – just as it was in October. The moving averages are extended far away from each other – also just like October. This time, though, we now have negative divergence in place as well.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

It sure looks to me like the dollar index is forming at least a short-term top. So, while I didn’t recommend shorting the buck in October, the current setup looks like that could be a good trade for aggressive traders.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
\nEditor, Market Minute<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

It looks to me like the dollar index is forming a short-term top.<\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[61],"newsletter-type":[],"ticker":[],"class_list":["post-22413","post","type-post","status-publish","format-standard","hentry","category-uncategorized","publication-market-minute","person-andy-krieger"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/22413","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=22413"}],"version-history":[{"count":2,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/22413\/revisions"}],"predecessor-version":[{"id":22946,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/22413\/revisions\/22946"}],"wp:attachment":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=22413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=22413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=22413"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=22413"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=22413"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=22413"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=22413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}