Whither (Not Whether) The Dollar ...

There has been a lot of back-and-forth discussions in the past week or so on outlooks for the dollar - all, of course tied to what people think the Fed will do with rates over the next year i.e. how many rate hikes and how much. And of course inflation and the Russia/Ukraine situation play into the calculus as well.

A number of well-known banks have been forecasting a weaker dollar - and it has slipped in recent days. But ... one of our favorite indicators (using the Markov process and one we call "Regime Change") isn't indicating that the slow but positive moves in the dollar are changing (as measured by the U.S. Dollar index.)

In other words, don't short the U.S.!