I wanted to show that the Trannies are not confirming the current move in the Industrials. Also there are some interesting developments with the Dollar
The advancing Dollar was being supportive of the rally (whereas the market should have been crashing on the strength of this dollar advance based on the previous inverese correlation) during December. The inverse relationship is starting to weaken. And as I have said many times in the past, eventually the Dollar and the market will resume its long term trend of positive correlation. I obviously have my opinion on the direction for both. I think the correlation will be muddy for the next 3-6 months and then after that strong positive correlation will take place.
I discuss this behavior in more detail here: Thoughts on the US Dollar, Analysis of the USDX Long Term, Follow up on the Gold Blog
