That is a monthly chart of U.S. Dollar futures with Bollinger bands around the price and Bollinger bandwidth on the bottom (which measures the width between the upper and lower bands in case you didn't know). Look at how low (tight) the bandwidth reading is, that is insane. Obviously this is a scenario that is going to play out over the next few years, and being that I am not only a trend follower but a realist, I think the squeeze is going to blast to the downside when it does trigger. Not that I want it to, I want to see a strong dollar and more purchasing power.. I just think that is the probable scenario.
I won't go into all the fundamental reasoning behind that claim because people a lot more experienced than me make plenty of videos on this topic and I am going to post one at the end. All I wanted to bring up with this post is the complete stalemate in the price action of the dollar, which has led to volatility building up for a while and will be released at some point. That theme really fits in with a lot of people's idea of the fate of the dollar who really do a lot of studying on this. Anyway, that is something to be aware of even though it could take years to play out. Who knows how long they can keep up this charade they are playing, but things are brewing under the surface.
I know a lot of people try to play on people's fear of this kind of stuff, but I do find it to be a very serious concern and I think there are a lot of very real arguments for a large devaluation of the dollar exchange rate. I don't believe the government is going to save the day and I think they are continually making things worse while living in a fantasy land. But, until SHTF let's just live in the fantasy land with them and act like the U.S. economy is recovering so we can bid up stocks through the roof. If you do follow the fate of the dollar like myself and you are a technician then you know why I made this post about the monthly Bollinger bands confirming the talk of a huge move coming in the dollars exchange rate. Here are some arguments by Dr. Paul Craig Roberts, a guy I have a lot of respect for:
Economics has supply and demand and so what we've witnessed in the last 5 years is a huge increase in the supply of dollars but we don't see the demand for dollars rising in commensurate, instead we see people talking about avoiding the use of it or finding other arrangements just like we've been talking about in this discussion were having now and also we haven't seen any robust economic growth in the United States which would increase the demand for dollars or any robust growth in world trade which would increase demand for dollars as the world currency. So when you watch for five years the supply grow relative to the demand then you have to say at some point there has to be a price effect. -Dr. Paul Craig Roberts
