Courtesy of Chris Kimble.
On 6/7 a reliable currency indicator was suggesting the S&P 500 was at a low and could rally as much as 13%. (see post here)
Prior to calling for this rally, the currency ratio had called for a 7% decline, and the markets followed through! (see post here)
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The Australian Dollar/U.S. Dollar ratio has a pretty good track record for predicting short term rallies and declines over the past couple of years!
The action this week in the AU$/US$ ratio is suggesting higher prices for the ratio and the 500 index.
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Summary…..One of the better tools of late to predict rallies and declines in the S&P 500 is the AU$/UD$ ratio and the break above falling resistance at (2) suggests higher ratio and 500 prices. The last two times the ratio broke resistance the 500 index rallied 13%. Different this time around? Time will tell.
Excess Dollar bulls doesn’t hurt this ratio either(See post here)
