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SP500 Index: US Dollar Driven ?
November 9 ( From TradingView )
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SP500 Index: US Dollar Driven ? $SPY, $USD, #Trading #Seasonalities #SP500
US Dollar Index ( DXY - Top Panel )
Correlation DXY/SP500 ( Middle Panel - Blue Area )
SP500 Index ( Bottom Panel )
We have been in one of the most Bullish Stock Market in history
since 2009. The Mighty SP500 Index from a low in March 2009 of
666.79 to the high ever on May 2015 at 2134.71 rose by a factor
of 3.2 spurred by low interest rates and strong buybacks from
In fact, when we broke a Rising Wedge Pattern on August 21 2015,
game was over on SP500 on a short term basis and then reached then the panic selling level on August 24 at 1867.01. ( See Chart Below - Bottom Panel - Bottom Grey Trendline )
Since then, a huge rally occured on the Mighty SP500 and reached almost a Major Resistance Trendline that started back on May 20 2105. ( See Chart Below - Bottom Panel -Red Trendline )
US Dollar and SP500 Correlation
Back in April 2015, we started to observe a new behavior as the stock market was getting near its high ever.
But the most striking factor is the relationship ( correlation ) between the US Dollar Index ( DXY ) and the Mighty SP500 Index on a Daily basis as shown by the chart below.
So we can observe that when correlation is getting near or over 0.65 and or the US Dollar Index have a short term rally, then most of the time, we started a tiny correction in the SP500 Index as it happened in April, May, August and now. ( White Vertical Lines - Chart below )
But the most interesting technical factor is that the US Dollar Index Broke this week a Major Resistance Trendline that started back on March 13 2015. A game changer for International portfolio managers.
( See Chart Below - Top Panel - Grey Trendline - Ellipse )