Based on the contrarian magazine cover theory (which works amazingly well), the dollar should stage an amazing recovery –
Headline of the latest issue of Newsweek: "The Incredible Shrinking Dollar". Subhead: "What it means for America’s future – and yours."
I don’t know what it means for the equity markets but a falling dollar has been considered a positive for the past three years. However, the correlation is not very stable…sometimes it means something, sometimes it doesn’t.
The monthly chart is the most oversold that I’ve ever seen. The ADX on the Monthly is close to 40. That usually means the trend is coming to an end.
