I am attempting to build a strategy in relation to the movement of the DOW and S&P. At times the USD will sink while the market rises and visa versa. They will move in the same direction for a while as they did the Q4 of 2010. Is there another variable that I may be overlooking that determines when they will move together or go in opposite directions? Currently using ( MACD,RSI,Stoch) along with 21,55,100,200 SMA’s on an hourly and daily timeframe.
It’s a combination of the macro fundamental backdrop and broad market psychology that determines those correlations.
Thank you. Do you have any information on resources to monitor those?( Blogs, websites,etc…) I am trying to narrow this down as much as possible, at least as much as 1 person can do, any help or information would be appreciated, .
It really comes down to tracking what’s moving both markets. You can run correlations to see where they are at and when they are changing, but in order to really understand why the correlations are changing (and therefore to be able to anticipate when they will shift) you need to pay attention to the fundamentals and the way the market reacts to news and events.