The Vaunted Weak Dollar Correlation Is Dead

gold

The dollar is rallying.

 

Shouldn’t stocks be falling according to the all-important weak dollar correlation we’ve been fed by traders and pundits over the last few months?

It was supposed to explain everything.

Well like most correlations, it seemed right until it simply wasn’t. It will probably seem right again in the future.

Thus the dollar is up today against most major currencies, while U.S. stock indices are rallying at the same time.

Gold continues to sell-off, down almost another $30, to $1,140. The short-term chart above looks pretty ugly.

Yet not all commodities are in bad shape. Natural gas is rallying over 6%.

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