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The Great Debate: Reflation Versus Deflation - reflation cartoon 10.13.2015

Good thing the jobs number was a bomb.

Heading into today SPY was up for 5 of the last 6 days on a massive reflation move that squashed the dollar as investors bet Dovish Fed = Down Dollar = Stocks Up. The U.S. Dollar index is down -1.7% since then.

The Great Debate: Reflation Versus Deflation - dxy index 6 9

But with the dollar up today, the reflation trade has been unravelling a bit. 

Where do we go from here?

Here's analysis via Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning.


"With USD signaling immediate-term TRADE oversold this wk, did we see the final push/capitulation/chase in all things Down Dollar Dovish Fed, or is reflating the former bubble just getting started? Sounds like a Q3 Hedgeye Macro Theme in the works… Oil +41% in the last 3 months but Copper -6.4% - demand?"