Annual scenario planner 2026

The prevailing assumption remains that a strong U.S. dollar is incompatible with a healthy equity market. In practice, that relationship has been far more consistent than most are willing to admit. Dollar strength is inherently deflationary, and sustained dollar advances have historically coincided with tightening financial conditions and pressure on risk assets. That is precisely why the current dollar outlook fits cleanly with our broader bearish scenario for equities.

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…nor is it a reaction to near-term headlines. It follows directly from the larger transition we have been outlining as Neptune exits Pisces and enters Aries. That shift marks a move away from narrative-driven markets toward environments governed by power, enforcement, and consequence. In such conditions, money aligns less with optimism and more with authority, liquidity, and control.

From a timing perspective, the dollar completed an early-year basing process in mid-January, marking a clear change of trend (down to basing.) That window aligns with the exhaustion of selling pressure and the beginning of a renewed advance. From there, the structure favors dollar strength through the first half of the year.

A second inflection appears in mid-April, best understood as a momentum crest rather than a final high. This window is likely to produce a pause or shallow retracement, but not a trend failure. Importantly, this April timing window mirrors the same change-of-trend period we have identified across U.S. equity indices, reinforcing the intermarket consistency of the signal.

The most consequential dollar inflection arrives in late June to early July, where timing pressure points to a primary exhaustion of the advance. This window coincides closely with projected turning points in equities as well. A firm or peaking dollar into early summer would further tighten global liquidity conditions, increasing downside risk for stocks and other risk assets.

Finally, early September represents the confirmation phase. This is where dollar strength begins to resolve into a more durable downtrend, and where equity weakness is likely to broaden rather than stabilize.

The key takeaway is not simply that the dollar is expected to rally, but that its timing structure aligns almost perfectly with equity change-of-trend dates. A rising dollar into mid-year reinforces the case for equity vulnerability, not resilience. This is not a contradiction; it is the mechanism.

The probability increases of a low is in place or nearly in place in the US dollar index. Based on the volatility extreme reached last week both short term and intermediate term. This context is in line with our timing model above.

As always, the analytical method matters more than the narrative.

Great and many thanks,
Jack F. Cahn, CMT+
MarketMap™ 2026 Scenario Planner
Contrary Thinker™ since 1989

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