Is it over yet?...In your dreams. At recent dramatic inter-market stage there has been an inverse relationship in which dollar, the greenback's, weakness sends investors into risk assets like stocks, based largely on the notion that an export driven economy is the best market can hope for. With the subsequent grand scale monetary intervention from the Federal Reserve following the financial crisis in 2008 and 2009 still ruling the day, strong-dollar/weak stocks remains the trade of the day today and the dominant force in the market so far this month. Until we see the Fed step away from its inflationary policies, you are going to see this relationship.
The latest development toward the end of May clearly shows that strong volume of USD in previous short position against dollar will soon explode and accordingly worsen the overall market condition. Dollar has risen even without the strength of short-covering. That might suggest that once the shorts do start to bail out, the dollar will gain even further. For the stock market, that would be bad news if current trends hold up. Again, is it over? Well, why not peek the chart below to see the least to expect. [image: USD.png] '+'
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