It appears as though Americans living in Mexico have again avoided the bullet. The USD has once again rallied at a crucial time. While the USD appears to be in a bear market, we have seemingly put in an intermediate-term bottom.

From 2012 through January of 2017 the USD was in a bull market and had the following effect on the USD/Mexican Peso.

With the USD now in a bear market, we have seen a strengthening in the Mexican Peso. If we can get the USD to continue its bear market rally, we may be able to cushion a strengthening of the peso in the coming months. 18.25 remains to be a number to be watched. More than likely the rally in the USD will run its course around the previous support point for the dollar at 91.75. Once that occurs we will either get a successful re-test of a final leg down to new lows.

Higher interest rates are usually good for the USD and we are starting to see this unfold.

Once the Treasury bonds complete their intermediate cycle low, with rates rising, things should settle down for the stock market. So, I’m content to just sit still with stocks as we should still have 12-18 weeks yet before the intermediate cycle in stocks tops. We may, however, experience some wild swings the rest of the week.

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