The Flush Stops, and the Dollar Blinks on a Hot Inflation Print

A falling dollar lifts everything priced in dollars, so the score just measures how weak the dollar is: its place in its trailing 52-week range, flipped. Dollar near its 1-year low approaches 100; near its 1-year high approaches 0. Thursday UUP closed 28.48, off Wednesday's 28.53 high, in a 26.395 to 28.5599 band, about 96.3% of range, so the score reads 4, up from 1.

Legend: green = turning up (CCI greater than prior and average); red = rolling over (below both); yellow = mixed. The wall of red is cracking: yesterday it was seven red, four yellow, one green; with gold, silver and the S&P bars inflecting up off their washed-out base it is now five red, six yellow, one green. The dollar is still pinned near the top of its range, but it is no longer making new highs, and every one of the eight carried-forward [6/24] bars rose on price today, so those reds are a day from lifting too. Nat gas remains the lone green. One bounce day is a crack in the red wall, not yet a turn in it.

For two days the market did nothing but sell hard assets. On Thursday it stopped. Eleven of the twelve instruments on the board closed green, and the one that didn't was the dollar. Crude led the bounce at +2.84%, the grains ran about +2%, palladium, platinum and copper all tacked on better than +1.8%, and even silver and gold, the two names taken to the woodshed all week, closed up +1.12% and +0.97%. The Supercycle Score, pinned at 1 for days, ticked up to 4. Small number. First step off the floor.

Here is the part that matters more than the green ink: look at what it bounced on. Thursday morning the Fed's preferred inflation gauge came in hot. Core PCE rose to 3.4% year over year, the highest reading since October 2023, and the headline number hit 4.1%, driven by energy. All week the fear was that a hot print would re-arm the dollar and press the whole real-asset complex flat against the floor for another leg down. The print came in hot. And the dollar fell. That is the tell. A debasing-dollar supercycle is, at bottom, an inflation story; when the inflation gauge runs hot and the dollar can't rally on it, you are watching the market quietly decide that hot inflation is a reason to own things, not dollars. That is the thesis breathing.

Now the discipline, because one green day off a washout is exactly where people get hurt. The complex is bouncing, not turned. Silver's 20-day CCI is still -191; copper's is -261. Those are washed-out, capitulation readings, and a single up day lifts them off the floor without changing their direction. Gold, silver and the S&P bars inflected to yellow, weak but ticking up, while Nasdaq is still red. The Turtle's rule cuts both ways: you don't sell into a washed-out tape just because it's down, and you don't declare the bottom because it had one good morning. Rogers would tell you to go look at the thing itself, and the thing that matters now is the dollar. It stopped making new highs and slipped on the one number that should have lifted it. Watch whether it keeps slipping. A dollar that can't rally on 4% inflation is a dollar getting ready to roll, and the day it rolls is the day this lull ends. The next read on positioning lands this afternoon, when the post-flush COT prints.

The business-cycle lull just showed its hand. For weeks the story has been a strong dollar grinding everything real lower while the long supercycle waits underneath. On Thursday the market got handed the perfect excuse to extend that, a 3.4% core inflation print, the hottest in nearly three years, and instead of the dollar charging on it, the dollar backed off and hard assets bounced. That is the single most important thing that has happened on this board in two weeks. It does not mean the lull is over; one day proves nothing, the CCIs are still washed out, and a strong-dollar week can resume tomorrow. But it is the first piece of evidence that the dollar's grip is a function of fear, not of fundamentals, because the fundamental case for the dollar, relative tightening, just got undercut by an inflation number the Fed can't easily hike into without breaking a slowing economy. The line this issue defends: a debasing-dollar supercycle is an inflation engine, and the tell that the lull is ending is not a green commodity day, it's the day a hot inflation print can no longer lift the dollar. Thursday was the first one. Watch for the second.

2yr 4.09% · 10yr 4.40% · 30yr 4.86%; 2s10s slope +31 bps, positively sloped and un-inverted (6/25 close). After Wednesday's broad bull-flattening the curve went quiet: the 2yr eased 2 bps (4.11 to 4.09), the 10yr 1 bp (4.41 to 4.40), the 30yr held at 4.86. The rate-cut bid neither extended nor reversed, it simply sat, which is its own kind of statement on a hot-PCE day: the bond market is not pricing the Fed hiking into 4% inflation, it's pricing the Fed eventually cutting into a slowdown.

The dollar event that just passed: May PCE / Personal Income and Outlays, Thursday June 25, core +0.3% m/m, 3.4% y/y (highest since Oct 2023, a touch above the 3.3% estimate), headline 4.1% y/y, energy-led. The market's verdict was a softer dollar and a firmer commodity tape, the supercycle-friendly read. The FOMC is behind us (June 17, held 3.50 to 3.75% for a fourth straight meeting, medium-confidence). (PCE figures high-confidence per the BEA release; the energy/oil driver medium-confidence.)

The next regular CFTC Commitments of Traders prints today, Friday June 26 (~3:30pm ET), capturing positioning as of Tuesday, June 24, which makes this the first smart-money snapshot to fully include the two-day flush. That is the one to watch: were the big specs caught long the metals into the washout and forced out, or had they already been lightening up into it? If the report shows the large specs were flushed out of their longs right at the lows, that's a contrarian positive, the weak hands are gone. The CFTC feed is off our current plan, so we flag the calendar rather than the numbers. With PCE now behind us and a post-flush COT landing this afternoon, the back half of this week tells you whether Thursday's dollar slip was a one-day breather or the start of the roll. (Timing medium-confidence.)

They fired the police chief up in Titusville this week. Whole town's talking about it, the city says Chief Lau broke a city policy he was supposed to be the one enforcing, and just like that, the fellow whose whole job was minding the rules got walked out the door for not minding them himself. My people are from Titusville. You grow up on that stretch of the Indian River and you learn early that a badge only carries so far; sooner or later the thing that holds authority has to actually follow the rules it leans on everybody else.

The dollar's having its own version of that week. For a solid month it's been standing at the front of the room hollering about discipline, strong, tight, in charge, the law of the land. Then Thursday the inflation number came in at a three-year high, 4% and change, the exact thing a currency is supposed to defend against, and the dollar couldn't lift a finger. Couldn't even hold its high. The chief got caught not following his own rule. Flip on the television and the two stations are arguing about everything except that: Coke-TV says the strong dollar's still the man in charge, Pepsi-TV says the Fed's about to crack, and neither one mentions that the fellow with the badge just got quietly shown the door by a 4% inflation print.

Out here we don't argue it, we just watch the river. The tide's the same as it's been all year: a dollar that loses a little value every season, dragging everything real up behind it slow as the current past the old crawlerway. It went out a hair this week, for the first time in a while. One tide change doesn't move the channel. But you note when the water finally turns, because down here that's the only thing that ever really did.

The flush stopped, the dollar blinked, and a hot inflation print couldn't save it, that's a crack, not yet a turn. Stay washed-out-and-patient: watch the dollar for the second slip, and let the COT talk this afternoon. - Brad

Brad Hoppmann · Editor · Supercycle Trader
25-year financial-publishing veteran; founder of the supercycletrader.com hub.

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Data sources: the Board via Financial Modeling Prep daily ETF-proxy quotes (6/25 close vs 6/24 prior trading day); CCI bars for Gold, Silver, S&P 500 and Nasdaq computed fresh from FMP futures/index OHLC (GCUSD, SIUSD, ^GSPC, ^IXIC) through the 6/25 close and validated against the 6/24 published CCIs; the other eight CCI bars carried from the 6/24 close (OHLC off-plan this run). Live gold cross-check via Crypto.com (GC Live / PAXG). Treasury curve via FMP (6/25). Supercycle Score = inverse of the US dollar (UUP 52-wk range; low 26.395 / high 28.5599 / close 28.48 = 96.3% of range). Built 2026-06-26; data reflects the Thursday 2026-06-25 close.

Educational publication of supercycletrader.com. Not individualized investment advice.