John Carter Futures Review: Dollar Strength is the Theme

In today's update, we're looking at some markets that are showing signs of serious unwinding. Starting with gold, on the weekly chart gold had an extensive consolidation and failed to squeeze to the upside, so a new leg lower looks to be underway. This development has implications on both silver and platinum, which are highly correlated to gold. Silver has been relatively weaker, so it continues to drift, and platinum also heads lower even though it previously held up relatively well. The dollar continues to be extremely strong, putting deflationary pressure on many asset classes and presenting a warning for stocks. Other currencies such as the Euro and Aussie dollar are also getting hit hard. The Yen has been getting destroyed, which has been bullish for stocks over the last two years, but interestingly stocks have failed to catch a bid during this most recent Yen implosion. As these various moves unfold, the question is whether stocks will follow suit lower or squeeze higher as cash rotates. The Russell has been the weakest of the indexes, and should provide a leading indicator to the next move for the other equity markets. The XLE energy ETF has been getting destroyed, putting in a confirmed reversal and heading lower. The grains are extremely weak across the board. Live cattle is the strongest of the futures market, and the one place I would look to buy on pull backs.