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Don't Fight the Dollar

One chart tells it all. We've got a weekly cahrt of $UUP, a dollar bull fund up top. And we've got the rolling 3 month correlation between $UUP and $SPY.

So from this chart we know 3 things:

1. The dollar is in a downtrend.

2. The correlation between the dollar and equities has been negative since the cyclical bull market started.

3. The dollar is breaking down.

Given these 3 conditions, we can conclude that equity markets are going higher.

If you want to argue against the conclusion, you have to explain which of the 3 conditions presented earlier have changed.

by Steven Place

Steven Place is the founder and head trader at