Chart 1: USD's daily chart as at 22/4/2009 (Source: Stockcharts)
From Chart 2, we can see a close inverse correlation between DJIA & USD. This inverse correlation developed as investors sought out USD as a safe haven during the tumultuous period of the Global Financial Crisis. With the critical stage of the crisis appeared to be over, would this relationship still hold?
Chart 2: DJIA & USD's daily chart as at 22/4/2009 (Source: Stockcharts)
If this inverse correlation still holds true, then the continuation of the uptrend for the USD would signal a correction for DJIA. I have plotted below the chart of DJIA:USD, which shows signs of correction.
Chart 3: DJIA:USD's daily chart as at 22/4/2009 (Source: Stockcharts)
4 comments:
Alex,
For USD against RM, what rate it will go up to? And in what term (one month, two months time etc?
alex, our Bursa continue to break record year high despite weak fundamentals. Is the banking crisis over?
Hi AC,
I think USD/RM exchange could rise to 3.80 level, within next 2/3 months. I doubt our BNM will allow this rate to go below 3.80.
A good link for a chart of this rate is- http://finance.yahoo.com/echarts?s=USDMYR=X#chart2:symbol=usdmyr=x;range=2y;indicator=sma(100,200,400)+volume+macd+wpr;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Hi MaxWealth88,
The experts are divided on whether the Global Banking System is on the mend. The recent crisis is one-of-a-kind (think Ebola) & was so contagious & virulent that the authorities have pulled out all stops to tackle it. I don't know for sure whether it has been resolved. Like everybody else, I can only hope that the extreme measures taken will do the trick. The market seems to think so. Will the patient be up & running any time soon? I doubt it. We can declare a small victory as long as the rut in global economy has been halted for now.
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