Coldhelium, financial markets are not rational - they are...

Coldhelium, financial markets are not rational - they are emotional. So fundamentals mean little, if anything at all. Look no further than recent market action in silver as a classic example. The strong fundamental story merely got everyone so euphoric about silver prices spiked into a parabolic top which had to crash. The fundamental story has not changed, but sentiment towards silver has.

In that article he points out that stocks, commodities & forex all rallied higher on a falling US dollar. This inverse relationship has maintained a consistently high correlation - ever since the March 2009 low. So he is suggesting that if the dollar is commencing a new rally phase, then global liquidity flows and the carry trade would unwind leading to a selloff in stocks, forex and commodities - regardless of so-called fundamentals. I happen to agree with him.