NASDAQ Bubble Bust DXY Correlation
The market peaked in Nov and is in Bubble-Bust-Mode. DXY is breaking out upwards from a multi-year consolidation.
Looking back to the DotCom Bubble and comparing NASDAQ to DXY, DXY broke out near the equity peak and reached its peak when NASDAQ was near bottom of the crash. It's not a perfect correlation in shorter time-frames, but close enough that it may be useful on the macro time-frame.
If the current Asset/Big-Tech Bubble rhymes with history, look for DXY to continue upward into 110-120 range or higher over the next year or so as NASDAQ plummets back down to reality, e.g. somewhere around the 200 Month Moving Average. Then whenever DXY is crashing back down towards ~100 that may be a good signal that the bottom is in for equities.
Looking back to the DotCom Bubble and comparing NASDAQ to DXY, DXY broke out near the equity peak and reached its peak when NASDAQ was near bottom of the crash. It's not a perfect correlation in shorter time-frames, but close enough that it may be useful on the macro time-frame.
If the current Asset/Big-Tech Bubble rhymes with history, look for DXY to continue upward into 110-120 range or higher over the next year or so as NASDAQ plummets back down to reality, e.g. somewhere around the 200 Month Moving Average. Then whenever DXY is crashing back down towards ~100 that may be a good signal that the bottom is in for equities.
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