This week we came right out of the gates with the Chart of the Decade.
The catalyst for stocks to have a sustained rally is a weaker US Dollar.
The market keeps proving that to be right.
And yes, I am aware that in the 1990s, a weaker Dollar was not the bullish catalyst for stocks.
But are you aware that this is not the 1990s?
It’s 2022 and the correlation has been consistently negative between stocks and Dollars.
Until that changes, we’re not going to fight it.
And while this week’s chart was comparing the US Dollar to Emerging Market Currencies, in this post I want to focus on the more developed countries.
The Euro, British Pound and Yen represent 83% of the entire US Dollar Index.
The Euro and British Pounds both bottomed in late September, while the Yen put in its low last month. [Read more…]