Chart of the Decade: "THE Catalyst"

November 17, 2022

If you're still asking what it will take to spark a sustained rally in equities, it's only because you're not paying attention.

How is it not the US Dollar?

Find me a stronger negative correlation with equities over the past half decade or so.

Todays chart focuses more specifically on the performance of US Dollars relative to Emerging Market Currencies.

Notice how whenever the Dollar goes down, stocks absolutely love it:

Could this be an epic failed breakout in the US Dollar leading to another epic collapse in prices?

If so, just think about how well stocks will do in that environment.

Are you positioned for another ripper in equities?

Well if the Dollar really sells off, you better be positioned for it.

These are real opportunities.

And since we know the catalyst, we know what to focus on.

I've said it a thousand times and I'll say it again: Investors are going to have a hard time making money long stocks if the Dollar remains strong.

We've seen just a little bit of Dollar weakness and look how well stocks have done.

What if we get real Dollar weakness?

The stage is certainly set (See here)

So what's the best way to profit from a weaker Dollar?

I laid out my favorite ways during our Live Conference Call last week.

Let me know how you're expressing this thesis in the market, or if you're not at all. And if so, why not?

- JC

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