Friday , 22 September 2017


U.S. Dollar Index Trend Suggests S&P 500 Going to 1400+ Soon

The U.S. Dollar Index is signaling that this rally might have a bit more room to run. [Let me explain.] Words: 400

So says Andrew Mann in edited excerpts from his original article* as posted on Seeking Alpha which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!),has further edited below for length and clarity – see Editor’s Note at the bottom of the page. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Mann goes on to say, in part:

USD – U.S. Dollar Index and the S&P 500

Generally speaking, a rising dollar index is bearish for equities and vice versa. To illustrate my point, look at a chart of the U.S. Dollar Index vs. a chart of the S&P 500 (SPY) for the past year.

click to enlarge



As you can see [above] the U.S. Dollar Index formed a 12 month low at around the same time the S&P 500 hit a year high on May 2, 2011. Throughout the past twelve months a relative top/bottom in the U.S. Dollar Index has been met with a corresponding bottom/top in the S&P 500. The green arrows indicate a top/bottom in one index, and the corresponding bottom/top in the other.

Who in the world is currently reading this article along with you? Click here

Most recently the U.S. Dollar Index hit a year high around 82 in early January, and has been dropping ever since (this is around the same time that the S&P 500 started its current grind upwards.) The U.S. Dollar Index spiked last week (due to Greek debt talk fears), but hit resistance at the 50 DMA and came back down. I am looking for support around the $78.50 area, and if that breaks than we will probably see 1400+.

Keep in mind that on a relative basis, the U.S. Dollar Index has a bit more to fall before it reaches past levels where the S&P has topped. This also gives me a reason to think that this rally could continue; especially if the macro data continues to beat.

Conclusion

Watch the U.S. Dollar Index (good idea to watch the Euro (FXE) as well) for confirmation of market moves, keep an eye on the macroeconomic data, and the headlines coming over from Europe. With the Greek debt talks being all but complete, it seems as if the proverbial can has been kicked for at least the next few months.

I think that the probability of a continued equities rally is better than even.

* http://seekingalpha.com/article/382111-dollar-index-is-signaling-this-rally-has-more-room-to-run

Editor’s Note: The above article has been has edited ([ ]), abridged (…) and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Why spend time surfing the internet looking for informative and well-written articles when we do it for you. We assess hundreds of articles every day, identify the best and then post edited excerpts of them to provide you with a fast and easy read. Sign-up for Automatic Receipt of Articles in your Inbox and follow us on FACEBOOK | and/or TWITTER so as not to miss any of the best financial articles on the internet.

Related Articles:

1. S&P 500 Should Continue Climbing Until October and Then Decline 15-30%! – Here’s Why

investing

At the end of November 2011 the U.S. behavioral indicator for the U.S. stock market, based on insights on investor psychology, touched the crisis threshold for the fifth time (1971,1979, 1986, 2006) since 1970. If the current case follows the four prior cases, we expect a similar positive return from November 2011 to the end of October 2012 as in the four prior periods followed by a decline somewhere between 15% and 30%. [Let me explain.] Words: 317

2. Yardeni: Lower Unemployment in 2012 = Higher Stock Market in 2012

investing3

Initial unemployment claims may be the most important economic indicator for the stock market in 2012. It is one of the three components of our Fundamental Stock Market Indicator (FSMI), which is highly correlated with the S&P 500, [see graph below] so if initial unemployment claims remain under 400,000 and possibly continue to head lower during January, that would support the strong stock market rally that has kicked off the New Year so far. Words: 395

3. Fractal Analysis Suggests Dow Could Drop to 6,000 in 2012 and Gold Take Off Like It In 1979

investing3

[While] I do not prescribe to the 2012 end of the world or end of an era phenomenon, my recent fractal (pattern) analysis of the Dow suggests that it is forming a similar pattern to that which was formed in the late 60s to early 70s and if this pattern continues in a similar manner…the Dow could indeed have an annus horribilis (horrible year) in 2012. Let me explain. Words: 1416

4. Don’t Invest in the Stock Market Without Reading This Article First

investing1

History has shown that investors who stick to disciplined, fundamental-focused strategies give themselves a good chance of beating the market over the long haul and James O’Shaughnessy has compiled data that stretches back to before the Great Depression…back-tested numerous strategies, and has come to some very intriguing conclusions. [Let me share some of them with you.] Words: 1325

5. What Does 2012, as an Election Year, Mean for Stock Market Returns? Here Are the Facts

stockmarket

Next year is a Presidential election year, and the stock market is almost always positive in election years. Right? At least that assurance has been a supposed truism for many decades, and repeated as fact each year in numerous interviews and financial columns. [Let’s explore just how correct those assumptions really are.] Words: 367

6. What Do the Presidential and Decennial Cycles Infer Will Happen in 2012?

Should we jump into the market now? [Let’s take a look at the 178 year history of the 4-year Presidential Cycles and the Decennial (10-year) Cycles and see what they suggest might well unfold in 2012.] Words: 1174

7. Don’t Invest in the Stock Market Without Heeding These “Rules of Trading”

investing1

I’m not going to candy coat it for you: making serious money in the stock market is a ton of hard work. It takes patience, savvy, and a certain level of market smarts – and the cold, hard truth is that if you don’t have them, the big boys will drain your portfolio dry. Unfortunately, those are the three areas that most retail investors need to work on the most. Otherwise, they will simply end up in a cat-and-mouse game where they are the mice. Don’t fool yourself for one second into believing that your “due diligence” can be done by watching a show or two on CNBC. It just doesn’t work that way but if there is one voice from the markets that should grab your attention every time you hear it, it belongs to Dennis Gartman, founder and author of The Gartman Letter. He’s sort of a guru’s guru. [Here is] a glimpse into how he views and trades the markets. Words: 1061

8. The GOOD, the BAD, and the Downright UGLY Factors Affecting the USD!

economy-usdollar1

The recent super-dovish FOMC statement of an extended period of low interest rates and possibly a full blown QE 3 replacing the current “light” version…raises inflation risks and so pressures the USD….[That being said, I present below the GOOD, the BAD and the downright UGLY possibilities for the USD as 2012 unfolds.] Words: 1500