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.

uup correlation Dont Fight the Dollar

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.


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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