THE LEAD

The dollar walked right up to the edge on Tuesday.

UUP rose 0.38% to $29.12. Its highest close of the past year is $29.13, set on October 12. That puts the dollar at 99.6% of its 52-week closing range, one penny short of the top. The Supercycle Score is the inverse of the dollar, so it fell from 5 to 0. They've Gone to Plaid. That is the floor of the model, and we are standing on it the morning the Fed decides.

This time the dollar's own trend agrees with its price. Its CCI jumped from 38 to 111. That is above Monday's reading and above its 14-day average of 56, so the thread turns green. It is a confirmed rising trend, not just a high number on a screen.

Here is the odd part. The metals rose right along with it. GLD climbed 1.2% to $372.28, its biggest one-day gain since August 25. Gold's CCI improved from -195 to -113. That is still below its 14-day average of -98, so gold stays mixed. Better, not yet good.

Silver did confirm, barely. SLV rose 1.0% to $49.16. Its CCI climbed to -119.5, a hair above its 14-day average of -119.8. That is the thinnest green on the board. Copper was cleaner. CPER gained 1.7% to $40.05, and its CCI swung from -67 to +46. The Nasdaq Composite rose 0.7% to 26,478 for its third straight gain, and it turned green too. The S&P 500 added 0.3% to 7,723 but stays mixed.

Crude went the other way. USO fell 1.4% to $163.88. Its CCI dropped from 129 to 98, under its average of 109, so its thread turns red. Its posture of 79 is still the second highest on the board, behind only the dollar. Corn and palladium are red as well. CORN fell 1.1% to $17.44 and PALL lost 1.1% to $18.74.

This morning the dollar index futures are up another 0.09% to 102.25. Gold futures are off 0.4% and silver is off 1.3%. Crude is up 1.8% to $101.68, and nat gas is up 2.3%.

Richard Dennis taught the Turtles to respect the trend in front of them, not the one they wish they had. The trend in front of us is a dollar at the top of its range with a green thread, and we respect it. We also note what happened underneath. Copper and silver turned up with the dollar, not against it. That kind of split matters most after the Fed, not before.

MACRO

The Treasury curve at Tuesday's close: 1-month bills at 4.10%, the 2-year at 4.70%, the 10-year at 4.99% and the 30-year at 5.30%. The 20-year sits at 5.34%. The gap between the 2-year and the 10-year narrowed to 29 basis points from 32 on Monday. The 2-year rose two basis points and the 10-year slipped one.

This is the Dollar Event. The Fed's decision lands today at 2:00 PM Eastern, with Chair Warsh's press conference at 2:30. The calendar consensus is a hold (medium confidence). Tomorrow at 8:30 AM brings third-quarter GDP, forecast at 3.2%, and September core PCE, forecast at 3.1% from a year ago. Headline PCE is forecast at 3.6%.

The setup is simple. The Score is already at zero. A hard-line Fed could push UUP to a fresh closing high, but the Score has no room left to fall. A softer Fed is the one outcome that moves it, and it would move it up. With the dollar a penny from its high, the Score has only one direction left to go.

POSITIONING

There is no new Commitment of Traders report until Friday, October 30, at 3:30 PM Eastern. That report will cover Fed week. The last one, through October 20, still frames the board.

Large speculators held a net long of 15,044 dollar index futures contracts, 65.1% net long, after at least three straight weekly adds. In gold, the same crowd trimmed for a fifth straight week, to a net long of 199,865 contracts, 86.42% net long.

The tell is the timing. The crowd is leaning long the dollar into the Fed, with the dollar a penny from its high. Meanwhile gold buyers came back on Tuesday even as the dollar rose. When a crowded trade meets an event, a surprise moves price the most. If Warsh sounds softer than expected, that dollar long has to unwind, and gold and silver are the first places it would show.

FROM THE PORCH

Over at Launch Complex 36 on the Cape, Blue Origin has its New Glenn access tower standing again. Space Coast Daily reported this week that the tower is back together. It took about five months, after a New Glenn rocket was destroyed there in a hot-fire test in May.

A tower is the least glamorous thing on a launch pad. Nobody buys a T-shirt with one on it. It holds the hoses and the walkways, and it holds the rocket up until the one moment it is supposed to let go.

Anybody who grew up in Titusville knows the other half of that story. A pad can be lost in about a second. Standing it back up takes months of steel going up one level at a time, and nobody drives out to watch that part.

That was Tuesday's board. The dollar is standing at the very top of its tower, one penny under its high, and the Score is sitting at zero. Down below, gold and silver are in the rebuild. Gold had its best day since August and still isn't confirmed. Silver got one level back, by a hair. Nobody is filming that either.

Coke-TV runs today as "Fed day showdown." Pepsi-TV runs it as "tech climbs for a third day." Neither one mentions the crew out at 36 that spent the summer putting a tower back together.

Four greens, three reds, and a Score at Plaid on Fed day. Respect the dollar's trend, watch the rebuild underneath it, and keep your eyes on 2:00. - Brad

Data sources: live front-month futures quotes (7:26 AM ET), ETF-proxy and index daily closes for Posture, the Golden Thread and the Score, the Treasury curve, CFTC Commitment of Traders data and the economic calendar, all via Financial Modeling Prep. Blue Origin Launch Complex 36 tower per Space Coast Daily (10/27). Hero photo: Lukasz Radziejewski / Unsplash.

This newsletter is for informational purposes only and does not constitute investment advice. Do your own research and consult a licensed financial professional before making any investment decision.