Today’s chart is from one of our regular readers The Avid Chartist, who has updated his study of the ASX200 and the S&P500, both denominated in USD. The chart plots the first day of the month from August 2007 through to October 2011.
As Avid says very well:
We Aussies are financially joined at the hip with the US. We’re not the only ones. The global financial system floats atop a sea of US dollar liquidity, which moves up and down not due to any imagined lever pulling by the Fed, other central banks, or governments, but due to fluctuating sentiment among investors and traders.