In the 2-year chart of the comparison between the S&P 500 index and the U.S. Dollar index below, one could easily spot one thing – when one goes up, the other goes down – except that one followed the other between 1/31/2020 and 3/9/2020.
After the U.S. Dollar index was unable to break through 102.99, the trend reversed. The Almighty Dollar continue to weaken until it set the low of 89.2 on 1/6/2021 before it reversed its course. The S&P 500 index, however, continued to move higher and closed at the record high of 3886. For the past month, both indexes have been moving in the same direction, which is closely resembling the pattern between 1/31/2020 and 2/20/2020.
Based on what we see in the chart below, can we assume S&P 500 is near the top so maybe it’s time to take the profit?