Wednesday, November 11, 2009

US Dollar Sitting at Potential "Double Bottom"

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Of captain... my captain... will you show us any life?




The relationship between the US dollar and every asset on Earth has now reached the point of absurdity.  As we've been describing for a few month, it is the end all and be all.  Doing some reading this morning the dollar - after its traditional daily beating - showed a little life after 10 AM and of course everything started selling off.  It's really just annoying at this point how no analysis needs to be done, and nothing matters other than the dollar.

As we step back and compare the S&P 500 chart to the dollar we see (of course) the complete inverse.  The dollar (above) is sitting at a potential double bottom.  The S&P 500 (below) is sitting at a potential double top.




You know the script from here.  [The Inverse Relationship Between the Dollar and Stocks in 1 Chart]   Stock fundamentals mean nothing... the entire market will move based on what the dollar does next.  If she has any life in her the market will sell off for a bit.  If she gives up the ghost and falls below this "double bottom" area, all assets on planet Earth will renew their run to the moon.  Obviously the powers that be in the central bank and federal government are doing everything possible to continue the breakdown so any bounce would have little to do with fundamental reasons and be technical in nature....

It's really that (pathetically) simple.  And I'm afraid (due to fears of turning stir crazy) this is all that is going to matter for months on end.

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