What's been driving macro markets?
Look no further than the U.S. Dollar, Hedgeye CEO Keith McCullough writes. Bulls are begging for a dovish Fed, as the dollar's inverse correlation to the S&P 500 (-0.72, 90-day correlation).
That's why it was so interesting to read the knock on effects yesterday, as the Down Dollar trade reversed even marginally. Here's analysis via McCullough in a note sent to subscribers this morning:
"Get the Dollar right and you’re still getting most things macro right – USD hammered #Reflation yesterday (Metals & Mining ETF -7.8% on the day!) and should signal immediate-term TRADE overbought on this bounce up at 94.65 USD Index."
On The Strong Dollar, Russia took a hit...
Meanwhile in Japan...
"Japan loves Up Dollar, Down Yen – Nikkei +2.2% overnight got US Equity Futures excited, but I’d fade that – Nikkei will signal overbought on the bounce around 16,667 inasmuch as Yen will signal oversold vs. USD around 110."