SPX & DXY " The 2 Beasts " Decoding the correlation coefficient.

1 ביוני 2021

How U.S. Stock Prices Correlate to the Value of the U.S. Dollar 2009-2021

1/ Only about 35% to 40% of the stock indexes' movements are associated with the movement of the U.S. dollar.

2/ Scenario # 1. Your portfolio is made up of shares that rely heavily on imported raw materials, energy or commodities to make money. A substantial portion of the manufacturing sector of the U.S. economy depends on imported raw materials to create finished goods. If the purchasing power of the U.S. dollar declines, it will cost manufacturers more than it did before to buy goods, which puts pressure on their profit margins and, ultimately, their bottom lines.

3/ Scenario # 2. Your portfolio is made up of companies that export U.S. manufactured goods around the world. Companies that rely substantially on foreign revenue and international exports stand to do very well if the U.S. dollar depreciates in value because they get more U.S. dollars when they convert from other world currencies. These companies sell products around the globe, and a low dollar just makes high-quality American goods more price-competitive in international markets.
------------------
DATA:
Crossing above
Zero line :
-----------------
Bull move
Top
Bull move
Top
Bull move
bull move
Top
Mid correction
Bull move
Mid pullback
Bull move
Bull move
Bull move
Bull move
Bull move.
Top
------------------
10 Bull moves
4 Tops
2 Mid pullbacks
----------------
62 % Bull moves.
38 % High Risk.
**************End pullback
Mid correction
Mid correction
Bull move
Side ways
Bull move
End Correction
Bull move
Top
Bull move
Bull move
-----------------
5 Bull moves
2 Mid corrections
1 Top
2 End corrections
--------------------
70 % chance we
SPX GOES UP
******
Crossing down
Zero line:
-------------
Mid crash
Top
Mid crash
Top
Mid pullback
End pullback
Top
Top
End pullback
Side ways
Top
Top
End pullback
Top
Mid Pullback
end Pullback
---------------
7 Tops
4 Mid pullback/correction
4 End pullback/correction
------------------
73 % HIGH RISK TOP/MID
CORRRECTIONS/PULLBACKS
***********************************
Extremes highs
-------------------
End correction
Bull move
Bull move
Top
Top
Top
-----------------
3 Tops
2 Bull moves
1 End correction
----------------------
50% chance we
SPX GOES DOWN.

*******************************************