Dollar VS Dow

[VulcanClassic]

Curious if anyone has an idea why the Dow appears to be inversly related to the dollar?

Seems like when there's a rally in the Dow there's a drop in the dollar, and visa versa.

[ankor34]

You know I've noticed that for the last 6 months. Even now the stock market has been up for close to 2 weeks now and the dollar has dropped considerable in that time.


take care,
Ankor34
Nova Mercantile Trading Company
Automated Trading -- Forex Robot
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[rhodytrader]

Right now the Dow and USD are inversely linked because the dollar tends to catch a bid when there's a resurgence of fear and risk aversion. That, of course, is exactly when stocks are getting sold off. When the markets calm down and have a happier view where stocks are rising, the USD loses the flight to quality bid.

[hem2998]

yes, been noticing the trend as well.

2 questions/possbilities come to mind if the stock market starts to sell off again..which i expect towards the end of april:
1) which currency would lose most from a strengthening USD?
2)can we see gold hitting USD1000 since it will be the investors first choice of flight to safety?

cheers!

HD

[jasonking09]

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Originally Posted by rhodytrader

Right now the Dow and USD are inversely linked because the dollar tends to catch a bid when there's a resurgence of fear and risk aversion. That, of course, is exactly when stocks are getting sold off. When the markets calm down and have a happier view where stocks are rising, the USD loses the flight to quality bid.

Precision Capital Management LLC published a report entitled...

A Grand Unified Theory of Market Manipulation
A Grand Unified Theory of Market Manipulation | The Precision Report

What is happening on the Bond and Equity markets is this and I quote from the report...

The POMO Effect

The theory for which we have the greatest supporting evidence of manipulation surrounds the fact that the Federal Reserve Bank of New York (FRNY) began conducting permanent open market operations (POMO) on March 25, 2009 and has conducted 42 to date.

Thanks to Thanassis Stathopoulos and Billy O’Nair for alerting us to the POMO
Effect discovery and the development of associated trading edges.

These auctions are conducted from about 10:30 am to 11:00 am on pre-announced days.

In such auctions, the FRNY permanently purchases Treasury securities from selected dealers, with the total purchase amount for a day ranging from about $1.5 B to $7.5 B.

These days are highly correlated with strong paint-the-tape closes, with the theory being that the large institutions that receive the capital injections are able to leverage this money by 100 to 500 times and then use it to ramp equities.


It's pretty obvious what is happening with "markets"...

And not only wth currencies and with equities. That stunt with Crude Oil on Thursday evening last week just after roll-over time was a beauty...