Market Anthropology: The Ying & Yang

Wednesday, November 28, 2012

The Ying & Yang


“Everything should be made as simple as possible, but not simpler.”Albert Einstein

The long and short of things is despite pockets of weakness, the US dollar index continues to trade in price and momentum patterns that strongly suggest strength. The chart below resonates on a few different planes, considering my work with the Australian dollar this year that showed segments of the currency markets were trending very similar to the US equity market top in July of last year. Should the USDX continue to trend higher, it will likely be at the expense of the precious metals market and the downstream benefactor of the Australian dollar. 

The dollar also continues to follow the pattern of its last secular low in the mid 1990’s. Based on the above 2011 SPX comparative, it appears to be taking the median path higher.