REGRESSION TO THE MEAN RARELY MEANS TREND CHANGE

All markets regress to the mean. However, only rarely does that signal a true trend change. Right now the dollar is regressing back to the 200 DMA. But does that really mean the trend of the dollar is about to change? Is inflation as measured by the dollar about to revert to deflation?

In the last 15 years the dollar has regressed to the mean 14 times. Out of those 14 occurences only 4 of those signaled a trend change and one of those only briefly reversed the larger trend.

If history is any indication the odds of this move back to the 200 DMA changing the trend of the dollar are not good.