SPX & U.S. Dollar divergance

Discussion in 'Trading' started by indahook, May 6, 2003.

  1. Now I have read John Murphy`s "intermarket technical analysis" and (for those who havent read it) the reverberating theme is...when two markets that normally move in conjunction diverge major moves are afoot. What do you guys/gals think? Since 4/22 the dollar and SPX have been like a two magnets of the same polarity. Something has to break!
  2. some people say a weak $ is good for stocks. anything that exports is helped. tech companys are big exporters.
  3. But the same holds true for our commodity markets, if the dollar is weak other countries buy our commodities which makes those prices rise which in turn is bad for equities and debt
  4. I don't know, but 35% of my fund is long gold stocks, and we're up 20% on each position since the beginning of april when we put em on. Paas (Fleck is a director) is also strong. I think that the move is a bit extended now, but any pullback is buyable. This will be a continuing trend that plays on dollar weakness. This weakness is systematic and will be lasting as the fed prints money to try and get the economy going again.

    I think the SPX eventually breaks and implodes. Dropping 60% in the next 2 years is not unreasonable. Currently, I have very few shorts though. This upside move is not over yet.
  5. The XAU has held its up trend line on the weekly chart, and is channelling on the daily since march and with the s+p approaching resistance things will get very interesting here.

  6. I think I can read your lips, not sure.... Breakout?
  7. I think so, as always I will wait for confirmation in either direction. Harris, do you have a website?
  8. I intend to eventually. Right now, every cent I have is invested in my fund or tied up in collateral with the bank to support a loan to keep the fund expenses going.

    Once I get more investors and some performance fees, I think I will do a website. I talked with a few guys and the going rates are 5-15k depending on how many bells and whistles.

    Given how well my fund has done, hopefully this will get "fast tracked" in the next few months.
  9. Anybody else care about about this divergance?
  10. OHLC


    Yep, I do care about it... caused me a few problems lately, as I use a lot of intermarket analysis.

    The adjustment is IMHO much more likely to be bear in matter of equities.

    #10     May 6, 2003