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The dollar index is down 1.4% against the basket of major currencies that make up the index in the first six months of the year. That is the lowest 6 month read since 2006, and has played havoc with trend recognition software and trading strategies.

The moves made by equities to regain lost 2007/8 values, and the subsequent inability to hold those gains in second quarter of 2009 has sent the Usd on a roller coaster ride that has tracked the daily ebbs and flows of regional stock and commodity moves.

Add in the extraordinary number of Treasury notes that have hit the market since March 2009, and it is easy to see why the volatility shown intra-day is unable to transpose itself into substantial moves on the dollar.

The new ‘Normal’ is becoming a re-alignment of fair value at the regional market opens, 20:00 EDT, 02:00 EDT, and 07:00 EDT, something that has sporadic bouts of order flow that then wait for the next re-alignment period. The global 24 hour market has sub-divided in the global 8 hour market.

The automated order process that hedges one position with another, and the constant flow of contingency orders running through the exchanges, remains unabated. The NYSE figures show that program trading numbers are at record highs, something that in itself perpetuates a traders market because of the sheer number of price changes that lead to alignment in another cross market, and that in itself creates a new order flow that starts the ball rolling again.

These are traders markets at the moment, and forex order flows are revealing light volume, low momentum, and weak trends. The July motto will be ‘get in, get out, get done’, or ‘buy it, and sell it if it goes up’, just as they were in 1987, 1997, 2000, 2002, 2007…..

The time to travel from peak to trough and back again, in the global business cycle is still 8-10 years, if you are outside of the U.S. However, right now the American business cycle, because of the imbalanced debt-to-growth ratios, are doing that trip in record time, and the more Treasury notes are printed, the quicker the famine to feast cycles will play out. We may need to get used to a traders market for a little while longer.