$SPY $DXY The Chart All Bulls and Bears Should See

SPCFD:SPX   S&P 500 Index
Today's all-time intraday high on the S&P 500 reminded me of a correlation I had looked at in the past.

I re-charted it just now and frankly, the implications are fairly profound.

1. Note that for most of the chart as the value of the U.S. Dollar Index drops, the market goes up.
- What that means is this. The stock market prices went up, but the value of our currency dropped. So even if you were making money your gains would be
more or less mitigated if not negated by the drop in buying power of the Dollar.

2. Note the vertical line I drew. It points to a month where the correlation broke, and both started to rise at the same time.
- What happened in November 2008? The Fed's first QE program began. So, as they unwind more and more, something is going to have to give. Maybe
a rate hike reduction. Maybe the dollar crashes as three of the main asset classes (equities, treasuries, precious metals) all melt-up at the same time into
one last grand parade before a devastating crash. Or perhaps they introduce more Quantitative Easing.

Note: I''m not saying this is going to happen anytime soon. Rather, I'm advocating one of my primary investing principles: ALWAYS HEDGE.

- dros

Be sure to stay-tuned at my blog for more updates:
Rishesh SIngh
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing House Rules Moderators Website & Broker Solutions Widgets Charting Solutions Help Center Feature Request Blog & News FAQ Wiki Twitter
Profile Profile Settings Account and Billing TradingView Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out