USD Dollar and SPX S&P 500 Daily Charts; Inverse Relationship Being Sorted Out Over Last Month

The US dollar versus SPX inverse relationship is easy to see in the charts. In fact, the exact top in stocks in January occurred at the exact bottom in the dollar. Conversely the exact bottom in stocks as April started occurred at the exact top in the dollar. The party continued. The dollar collapses in early April sending stocks to the moon.

However, in the back half of April to present, the dollar moves into a sideways funk. That did not stop the stock market party. Funky Stuff by Kool and The Gang. Soul Train was cool and humorously, helped white guys develop rhythm. The stock market cannot get enough of that funky stuff.

The US dollar bounces between 98.00 and 99.25 creating the sideways blue channel. Traders are waiting to see which way the dollar goes so they know where the stock market is heading. The dollar's sideways funk creates confusion but the euphoric bullishness and rampant complacency in the stock market, as verified by the put/call ratios and other metrics, carries equities higher.

Note how the dollar pauses at the top rail of the channel at 99.25 realizing that the decision forward will have a major impact on the stock market. The stock bulls want a weaker dollar. Stock market bears want a stronger dollar.

In late April and early May, the price lows with the dollar were met with positive divergence by the indicators. A relief rally is expected since the indicators are refueled and voila, the dollar moves higher again. The last two days show matching highs in dollar price so the indicators can be assessed for potential neggie d to see if the dollar may top and head back down again. Nope.

You can see that the RSI is in negative divergence and the stochastics were overbot helping create the one day of sogginess. However, the histogram, MACD, stochastics and money flow are all long and strong with more fuel in their tanks to take dollar price higher. That means the dollar will likely break out above 99.25 probably running to one hundo and as that occurs, the dollar versus SPX inverse relationship should re-exert itself (that means dollar up in the days ahead and stocks down). This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 5/20/26 at 5:16 AM EST: The dollar pops to 99.47 now at 99.40. Of course it does.