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“The very idea of the power and the right of the people to establish government presupposes the duty of every individual to obey the established government.” – George Washington’s Farewell Address, 9/19/1796

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Futures are looking at a modestly positive open this morning even as crude oil and treasury yields are higher. Buildings Permits and Housing Starts were just released, and this was one of the weirder reports we have seen in a while. While Building Permits topped consensus forecasts by about 100K, Housing Starts missed forecasts by about 150K! The reaction in futures has been modestly negative, but at this point, investors have their sites set on the FOMC tomorrow.

While it’s on pace for its third straight day of declines today, the US Dollar Index has had a big rally over the last two months that took it to its highest levels of 2023.  With that strength, the 50-day moving average (DMA) has been catching up to the 200-DMA which has also just started to turn higher.  Given the trajectory of both moving averages, the Dollar Index is likely to have a ‘Golden Cross’ in the coming days which occurs when a short-term moving average (like the 50-DMA) crosses up through a longer-term average (like the 200-DMA) as both are rising.  Technicians consider these types of patterns to be bullish over the longer-term, but often their record in theory is much different than in actual practice.

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