The U.S. Dollar to Stocks Ratio Breaking Down?

I have believed for awhile now that when the dollar rallied stocks would crater. However, the negative correlation between the dollar and stocks has started to breakdown over the last few days. This is not to say that stocks can't fall. I am merely pointing out that my evaluation of the equity markets might need a second look.

What to do?

I love my short positions. I am just not sure if we don't have another, short lived rally brewing behind closed doors. I may pick up a few long positions today to hedge against the potential of another push higher.

U.S. Dollar Futures Daily Chart

The U.S. Dollar has been screaming higher over the past week.

S&P 500 Futures Daily Chart

The S&P 500 "should" have dropped. But, it has been trading in a tight range.

I will post another update if I do decide to hedge my short exposure. Until then we graciously wait for Mr. Market to pick a direction. He has been rather stubborn the past month. Seems as if he learned some of his flip-flopping skills from politicians. Wait? Could it be that the government is secretly manipulating the stock market? No, it couldn't be. Could it?


Have a good day!