There is currently a divergence from the norm developing in the relationship between the US dollar and the SP500 index. Normally they run opposite to each other. When the US equity markets move higher the US dollar moves lower. Currently we have both the SP500 and US dollar in sync with both moving higher.
US Dollar strength indicates a Risk Off trade as Money (Measured in Billions) flows into US Dollars. So US equity markets should be declining as equities are sold to move to the safety of US dollars.
These are Demand-Supply trading forces.
Which One is Wrong??
Another trend indicator has long term US treasury bonds selling off (IE interest rates rising).
This indicates a Risk On trade as money moves from fixed income to equity markets.
These are Demand - Supply trading forces.
These 2 indicators are out of Sync.
So Again - Which is the Leading Indicator?
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