• Dollar Index Signal

• Optimistic Employment Report

• Gold & Silver Short-term flippening?

• Bitcoin’s Potential Breakout

• Thinking about buying a Home? Maybe next year

Dollar Index Signal

For the past few weeks, the dollar index has been stagnant. So far, the dollar index (DXY) has been the main driver of the risk markets, and with no movement, it’s hard to say what is likely to happen next. However, support was firmly rejected during the previous monthly close, which turned into resistance. That could indicate more dollar weakness heading into the end of the year. As for Treasuries, the inflation data in the coming week can create an explosive move. If inflation is lower, it may spark bull steepening, without much movement on the curve's long end. If it comes back higher than expected, then the longer end of the curve is expected to rise further. In either case, I still believe the dollar index will go lower into the end of the year.

Optimistic Employment Report

As expected, the unemployment rate came in at 4.2%, as expected, which suggests a strong economy, indicating that recession fears are becoming irrational. Non-Farm employment change beat estimates from a forecasted 126k vs 139k actual. Although these reports are optimistic, the trend isn’t, as the unemployment report has been trending upwards from its 2022 low. However, since May 2024, unemployment has stayed between 4% and 4.2%, showing that if it is weakening, it’s been pretty stagnant for the past year. Maybe next year for the bears.

Gold & Silver Short-term flippening?

Silver has surged to levels not seen since 2012. It has broken out from a multi-year symmetrical triangle and is poised to move even higher. Gold is, on the contrary. Gold formed and broke out of the double top and looks like it may be going lower in the short term, unless proven otherwise. This is the dollar effect. Trump’s plan for creating domestic resilience is weakening the dollar. If you aren’t hold hard assets the next few months or even years will be one to regret.

Bitcoin’s potential breakout

Bitcoin has looked very bearish the past few days, however today it broke out from down sloping trendline making it somewhat more bullish than before. Though, I would still proceed with caution. We’ve had a head-and-shoulders pattern imerge and breakout from the previous upterd, not to mention the Circle IPO and bitcoin treasuries. This creates extreme froth in the market, and unless we get a catalyst, like a continued drop in the dollar, we may see a pullback.

Thinking About Buying a Home? Maybe Next Year

The housing sector (HGX) has seen minimal recovery compared to other assets like the S&P 500 and Gold. This is primarily due to the environment that promotes higher interest rates. As the dollar crumbles mortgage issuers demand higher interest rates. So until Trump appoints his new Fed chair next year, interest rates will likely stay higher.