The Dollar Is the Key

Each rally in Stocks has been on the back of a falling US Dollar. I have included a chart below to illustrate this point.

Now, the S&P 500 (SPX) has hit a new rally high, but the Dollar has not hit a new low. The Dollar has a big decision to make here. A break above SPX 950 should be accompanied by a break below 77.5 in the Dollar Index.


The Dollar is now at critical multi-decade support. Failure here should be fuel for another run higher in stocks.

I would expect a break in the Dollar Index to be accompanied by a breakout by Gold.


I have total confidence in the long term devaluation of the US Dollar and the Long Term Bull Market in Commodities, Commodity-based Economies and many Foreign Currencies.

A falling Dollar has been used as a policy tool to ramp stock prices higher. That can last for a while, but at some point, people will lose confidence in the Dollar and pull money from Dollar-denominated Assets.