Today I want to write about something that I said on my Twitter about bearish indices. I wrote on my Twitter that bearish indices can affect the US Dollar to the bullish side. Many people wrote to my saying that they do not agree and think that with Indices getting a hit, USD will follow.
After getting all this emails and tweets, I decided to go to my charts and look the history between $SPX (SP500) and $DXY (Dollar Index) and here is what I found out:
Above you can see both markets together in one graph. We can clearly see that every time $SPX had a correction, it gave the USD a lift. But why this time we are not seeing a USD jump? I think it is because the Rate Decision next month and the market is quite divided if there will be rate increase or not.
However, I recommend you to have a look into my last post regarding the $USD for you to know where we are at the moment (very important).
With all these news regarding China and money getting out of the market, I still bullish $USD at the long term, does not mean I am buying everywhere.. but it means that I am buying at really selected levels.
By Thiago Duarte
Chief Strategist at Duarte Investment Group
thiago@duarteinvestmentgroup.com
@thiagotrader
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