Bullish Dollar v. SP500
Figure 1 shows a weekly chart of the SP500. The price bars marked in red are those times when our Dollar model (see this article) suggests an upward trend in the greenback.
Figure 1 SP500/ weekly
Since 2000, upward trends in the dollar have generally resulted in poor stock market performance. There have been upward, tradeable spikes in the SP500 while the Dollar is bullish. However, 5 out of 7 bullish trends in the Dollar Index over the past 10 years occurred during times of significant market (SP500) downdrafts. As a reminder, the Dollar model averages about 7 months per bullish signal, which is plenty of time for the SP500 to thrust up and roll over once again.
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Category: Dollar Index, Equities
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