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Here’s something you don’t see very often. During the month of November, not only did crude oil rally (thanks to today’s surge) gaining 4.6%, but the dollar also rallied more than 3%. To see both rally more than 3% in the same month is definitely not very common as there have only been nine prior occurrences in the last 30 years. What makes this move even crazier is that it is the second month this year that it has happened.
As shown in the table below, back in May, crude oil rallied even more (6.9%) as the US Dollar index also rallied 3%. Before that, you have to go back to November 2010 to find another occurrence. Looking at the other occurrences, there were also two occurrences in 2005 and two in 2000. For each occurrence in the table, we have also included performance figures for crude oil, the US Dollar Index, and the S&P 500 over the following one and three months. More often than not, the US Dollar index has given back some of these gains in the next one and three months with average returns of 1.1% and 1.2%, respectively. For crude oil and the S&P 500, though, the opposite has been the case as both have tended to trade higher in the next one and three months. In the case of crude oil, the commodity has averaged a gain of 3.8% over the following month and 5.7% over the next month. Meanwhile, equities have seen gains over the following one and three months two-thirds of the time with average gains of 0.7% and 2.8%, respectively.