When the U.S. dollar started to hit the downtrend Thursday, we didn’t know if it was going to break it. This is just an update to let you know it not only broke it later Thursday, but it’s spent multiple days above the downtrend line. It’s already done a back test, and the U.S. dollar looks to rise. Good for the dollar.
The correlation that has occurred in 2012 has been very cut and dried. When the U.S. dollar tanked, the market rose. When the U.S. dollar rallied, the market tanked. That’s it. That was the correlation. It’s not always that way, but it’s just been that way for all of 2012.
So, the question that is on everybody’s mind is, if you’re like me, is that correlation still intact? Guess what? We’re not going to have to wait long to find out because the U.S. dollar is going up. So, if the correlation is still there, then we’re going to be looking at the overall market go down.
InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the Open, Parabolic Options and Trending123. For more information on which service is for you click here.