Correlations

About 6 weeks ago I questioned whether historical and/or recent correlations would hold up, my bias was toward thinking they would not. We've seen the Gold/Market correlation go from 90-95% approx. to about 80%. Silver has fallen out with the dollar. A number of currencies have fallen out with the market and today we see the Euro/$USD have given ground vs the market.

For example:

 The SPY is in green, the Euro in red. Sure, overnight the Euro pulled a 180 degree turn from the time Italy was downgraded to send US market futures higher, but in the midst of today's rally, look how the Euro went sideways most of the day, and falling before the market, while the market exaggerated the bounce. I believe this happened more as a function of Wall Street tactics then anything, but even in afterhours, the market is down on most averages.

Yet the Euro has bounced since the market close. I just want to mention it in case you use as many different sources as I do to try to find confirmation. I suspect it will get worse in the near future.