Chart of the Day - Wednesday, February 9th, 2022

Today’s Chart of the Day was shared by Arun Chopra (@FusionptCapital). The chart highlights the impact that the US Dollar has had on stocks since the pandemic started. On top, is the S&P 1500, a broad stock market index that covers about 90% of the market cap for US Stocks. Arun points out that the broader stock market started losing momentum last Summer, right when the US Dollar bottomed and began trending higher. The middle panel shows that breadth also began to stall around the same time. The good news is that the Dollar is beginning to lose momentum now. It formed a failed breakout last week around 97, and it's attempting to break down from that six-month uptrend now. In a comment to The Chart Report, Arun said "I think the inability to hold above 97 recently was important. Dollar strength has been a headwind for the broader market since the Summer, but if it can cool off here, that headwind should cease to exist."