Market Outlook- All eyes on DXY?

I expect a strong market performance in October 2024, and this positive trend should continue for at least 3-4 months following October. However, before we reach October, we must first navigate through September—a month historically weaker for the market.

Adding to the uncertainty in September is the upcoming Federal Open Market Committee (FOMC) meeting, which will take place mid-month. I expect the market to take time to fully evaluate the impact of any rate cut decisions from the upcoming meeting. Investors will consider the potential benefits of these cuts while also interpreting them as a possible sign of a weakening economy.

Additionally, the U.S. Dollar Index (DXY) has started to decline, a trend that began during the Trump-Biden debate.

I believe the current market resembles 1998 in two key ways: Japanese intervention and similar interest rates around 5.25%. In 1998, the Fed cut rates while the US Dollar Index (DXY) declined until it bottomed, after which the market began to rally.

It is commonly understood that markets rally when the DXY falls. However, in our case, I expect the DXY to fall, bringing markets down with it. Later, I anticipate the DXY to bottom out, marking the bottom for market as well.

Comparing the 1998 DXY chart fractal, I anticipate a drop to the 97-98 levels, which could present a significant market entry opportunity.