Tail wagging the dog... dollar or equities?

Discussion in 'Trading' started by AyeYo, Nov 12, 2009.

  1. AyeYo


    Just a quick question, I'm not even sure if it has a definitive answer or whether it's just opinion.

    It's pretty obvious that the dollar and the (US, anyway) equity markets are linked.

    My question is, which is following which? Is the market following the dollar or is the dollar following the market? Watching EUR/USD in one screen and the Dow in the other, they move in pretty much in tandem. It's hard to see who's the leader by just watching.
  2. There's a few threads dedicated to this question in the Econ forum.

    equities are being manipulated. powerful economic/political/banking cartel stuff going on in currencies.....totally unrelated. Forex is manipulated as well but on a much wider/stronger level than the equities. it is difficult to explain but do some research and you will discover the truth.

    peace out
  4. Weak dollar = stronger equity.

    Unlike the 1970s

    We are a consumption nation and lots of US companies are tailoring towards selling to foreign markets using chink labor.

    So if you want to stay ahead, holding dollars and fixed income is a path to ruin in the next 10-20 years as the US is gutted of its output capacity and continues to print dollars.
  5. i think what you're trying to ask is when the market crashes into a double dip recession>> will the euro crash as well?
  6. wartrace


  7. Try to control your need to think you are somehow genetically superior. The Chinese are of the exact same species, Homo Sapiens, as everyone else. Those thinking themselves superior are usually the opposite - uneducated and ignorant.
  8. I think this should answer your question.

    exhibit A: USD/CHF - Bullish Today.

    <script type="text/javascript">var bfcParams = 'Symbol=USD/CHF,TimeFrame=1-Day,NumberOfBars=100,WebChartID=c0d47f6e-8e0b-4a34-baa9-d4e05f02ac27';var bfcWidth = '300';var bfcHeight = '250';</script><script type="text/javascript" src="http://www.freestockcharts.com/script/bfcEmbeddedChart.js"></script>

    exhibit B: SPY i.e. S&P 500

    <script type="text/javascript">var bfcParams = 'Symbol=SPY,TimeFrame=1-Day,NumberOfBars=100,WebChartID=74c130e8-88d3-4262-9e08-ecfda64a3d00';var bfcWidth = '300';var bfcHeight = '250';</script><script type="text/javascript" src="http://www.freestockcharts.com/script/bfcEmbeddedChart.js"></script>

    NOTE: the Dollar is following its own path while the AUD/USD, EUR/USD are following the SPY. Likewise the USD/JPY, USD/CHF are following the Dollar index. However, don't always count on these correllations because from time to time they come unglued and can ALL rise or fall together. The TLT i.e. Bond/Treasuries can rise or fall with the Dollar which can also move in the same direction with the stock market which can move in the same direction as gold and oil. YES ..........GOLD, OIL, DOLLAR, SPY, BONDS etc etc etc can ALL move in the same direction at the same time on the same day. It HAS happened before and IT can happen again. However...........TODAY IS NOT THAT DAY.

    :D :D :D

    Peace out.
  9. AyeYo


    ^I noticed that AUD/USD and EUR/USD have followed the SPY to the letter. That's where my question originated.

    Sort of...

    What I'm actually asking is: Is the market going up because the dollar is going down or is the dollar going down because the market is going up?
  10. its always a monetary issue

    everything is relative to fx.

    monetary policy>interest rates>inflation expectations>fx>bonds>commodities> equities
    #10     Nov 12, 2009