Please study the following two graphs. They illustrate quite clearly that more often than not during the last 20 years, the stock market and the USD have moved in the SAME direction, both up and down simultaneously. The problem is that most people are looking directly in the immediate rear view mirror and attempting to draw conclusions for the near future. I don't think that will work.

As has often happened, it is quite possible that if we are now in the next major leg down in the overall stock market, the dollar will not rally this time. Instead, it may fall with the market. A double wammy for those holding stocks. The long view of history supports this thesis.

Perhaps the dollar does rally. I am making no guarantees that the link has been broken. I am just trying to point out that it is not an AUTOMATIC negative correlation between falling stocks and a rising dollar, as so many now believe.

Please hang onto these graphs, so you can show them to whatever gold bears try to convince you to sell your gold assets due to a stock market crash.

(Original source: http://marketthoughtsandanalysis.blogspot.com/2009/09/thoughts-on-us-dollar-analysis-of-usdx.html)

Hysteria