The Carry Trade is explained in a previous post "The Carry Trade Explained" . There is an ionverse relationship between the US Dollar (I use UUP as a proxy) and the US Stock market as well as the recipients of carry trade money-mainly China, India to some extent and the Australian dollar. In all of the previous the relationship (inverse) is intact exceot for the UD major averages and only recenty. However, money flow and volume show it is highly unlikely that US euties are seeing a bigger sahre of Carry Trade Dollars. So why the decoupling recently? We have a strange time ahead the next two weeks, we have shortend holiday weeks and year end WINDOW DRESSING!I believe that explains the lower volume but even so, yesterday -a seemingly strong day, of the 84 NASDAQ 100 stocks that advanced, only 5 advanced on increased volume, the other 79 advanced on decreased volume and it's early in the week, I doubt they were taking the entire week off. other than yesterday and likely today, the market hasn't done much of anything since the start of November and October in some cases. The indicators on the averages and their inverse ETFs are all showing distribution so I think it's been a month of churning and nothing will be resolved until after the year is over, but for now they are doing as need to be done and the dollar's price movement had had almost no effect on US Averages. Here are the charts below. The red line is a comparison symbol "UUP" and the last chart has a cumulative volume indicator in blue and you will see, there seems to be no new infusion of carry trade dollars there, in fact volume is getting low as the market advances.
