There is currently an inverse relationship between the Bull Market and the Decline in the Value of the United States Dollar. This has not always been true historically, but has been the case since March. The market appears concerned about impending inflation. Commodities have increased in value. Bonds have very low yields. Real Estate values have been in decline. The Stock Market has become the alternate of choice for parking money.
1 Year, Weekly - U.S. Dollar has been in decline since March of this year. The above chart is a mirror image of the S&P 500 chart. As one goes down the other goes up.
1 Year, Weekly - SPY (S&P 500) - Flip it over and you have the Dollar.
Trade Page - Oct. 15 - Early in the day the ADs showed advances while the UVol/DVol was divergent. Later in the day both came together for a Bullish finish. It is difficult to have confidence in taking a position when these two important indicators are not in tandem. It has been our experience to sit and wait out inconsistencies. Otherwise, it it just a guess.
5 Day, 15 minute - Oct. 15 - An important trading rule is to not take a position contrary to the trend. When done the trader has the odds stacked against potential success. Why try and swim upstream when it is easier to go downstream. Look for entries that are consistent with the trend. This applies to short as well a longer term trades. A common problem is to see short term indications of a trade that look appealing only to realize in hind sight that the positions was contrary to the trend. Just make a rule "not to do that."
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