— Sam McCallum (@honeystocks1) September 16, 2020
Today’s Chart of the Day was shared on Twitter by Sam McCallum (@honeystocks1). On top is a chart of the US Dollar Index, and on the bottom is a chart of the S&P 500 inverted. The US Dollar and the S&P 500 have been in a negatively correlated regime in recent months. The Dollar has been aggressively trending lower since March. But at this point, it could easily mean revert higher in the near-term. Sam poses an important question here – What would a ripping Dollar mean for Stocks? Even if short-lived, a US Dollar rally would likely be a headwind for Stocks and other risk assets including, Commodities and Emerging Markets. As we know, correlations can breakdown at any time. However, as long as this inverse relationship exists, it would be wise to keep an eye on the US Dollar.