Dascore, thanks very much. Will look closely at what this might tell me. The gaps are calendar differences between US and your local timeframe. Can they be removed?
I use the USDx since the XJO is a tiny part of understanding global fund flows and asset cycles. I follow global trends, so am not only interested in one index. I do not trend the XJO at all to make decisions on remaining in the market or not. It's also a futures contract that can be traded - pure and simple.
Fundamentally, comparison of XAO and SPX (S&P500) is far more meaningful in terms of equity futures in AUS coupled with Nikkei and the SSEC indexes to gauge where we might be going overall. Demand leads, Australia follows.
The USDx however trend represents a much larger index of either (a) the traditional flight to safety, or (b) an overall demand (expectation) for growth in US. Without (b), any output of your cycles using USDx indicates a sensitivity to (a). Ignoring every other aspect of misinformative news, if you only watched the USDx trend/trends changes you get a much clearer picture of the health of equities versus disaster.
Hence, the USDx and the SPX trend correlations are paramount to virtually everything. Everything else is a sideshow.
The are many more reasons underlying how/why the USDx does what it does, but upwards in the USDx without sound economics in the US only spells danger. USDx down = stay long equities & commodities. USDx up = correction in Eq & Comm. The lower it goes, the more clearly this gets defined and the bigger the rally in USDx becomes (volatility increases).
The will work until the US actually ends up with a trade surplus and fixes the budget deficit. Until they do, USDx is down unless safety is called into play.
Hence I was curious what your cycle theory said about it. Do the calendar gaps in the chart introduce differences in the 49 day cycle? You didn't mark these tops and bottoms.
Brief, but hopefully explains it enough.
Regards,
LH
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