Bull and Bear Blog

US Dollar Continues To Get Stronger And We Expect S&P500 To Collapse As A Result And In Short Order

We are watching the relationship between the S&P500 and the US Dollar get bent over backwards.  Our first posting of this pending disaster was back on September 30 as the US Dollar was well into its breakout.

We then updated this on November 24 as we expected the S&P500 to tank based on the strength of the US Dollar.

And here we are today with markets at all time highs and the US Dollar readying itself to continue toward 99.00 and likely beyond shortly thereafter.  US Dollar strength puts enormous downward pressure on US stock indexes - something the Fed cannot continue to prop up.

We've said to keep an eye on the US Dollar with respect to commodities and we can now see what happened to oil, natural gas and copper.  Even gold and silver's expected move up has been muted as we had forecast  - we could eventually see gold collapse again.

More recently, we have reported the importance of the strength in the US Dollar and its negative impact on US stock indexes.  At some point soon, we expect US stock indexes to fall sharply - in the order of 200 points or more in a month for the S&P500.  Other indexes will follow suit.



Time Is Running Out – Why Gold Looks Ready To Collapse To $600 An Ounce

We initially called for and end to wave [1] / start of wave [2] at the end of October, but for two months, gold has not bounced (as is often the case with a higher degree wave [2] start in bear or bull markets).  Time is running out for the move after October to convince us it is in fact a wave [2] up.Click to Read More →

CCI Shows Different Than CRB But Deflation Message Is Clear – As Central Banks Continue To Pump Stock Markets

The CRB vs SPX commentary we posted last week showed a somewhat different picture than this week's CCI vs SPX brief.

The CRB has much heavier weighting for WTI Oil and varying weights for the 19 commodities that make up this index.  The CCI balances all 17 commodities included in its index (includes WTI Oil) equally.  But as you can clearly see, after the fall in mid 2011, commodities continued sideways down and the S&P500 DOUBLED.

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The CRB Index - the Commodity Research Bureau's index of commodities - has been struggling to stay up since 2011.  Notice the collapse in 2008.  This index is comprised of energies, metals, softs and agricultural commodity prices.  This index is a true reflection of the health of the US economy.  As the CRB rises, the economy tends to be in "good shape".  As the CRB falls, the economy tends to slow.

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UPDATED: SPX Inverted Relationship With The USD – With USD Up Sharply – SPX Ready To Tank

We posted the same on September 30.  Here we are almost two months later with no give.  Each day, the currencies traded in the USD amount to about $5.3T - yes, that's each day.  A 10% move in the S&P500 represents about $500B.  And now we know why it is so easy for Click to Read More →

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