The EUR/USD looks to be the catalyst

A quick refresher in currency/market correlations, a weak dollar makes US goods and dollar denominated assets like oil less expensive, so the arbitrage correlation sends the price of those higher. The Euro trades against the dollar so it behaves the exact opposite most of the time, meaning that a stronger Euro means a stronger market and commodities in general. Just think of the Euro as a risk on currency when it rallies and the Dollar as a risk off currency when it rallies.

I don't want to get too ahead of myself, but we did note some strange behavior in 3C on Tuesday, it seemed like there was a VERY sudden shift which kept the 1-5 min timeframes more positive than I expected them to be; it was startling and I'm still not sure if maybe, just maybe someone in the smart money crowd got word of something coming up.

If we were to see a new round of QE for instance, that would send the dollar down and in the past, send risk assets up, whether they deserved it or not, the correlation took over and that was that.

This post shows underlying weakness in the dollar, there's some underlying strength in the Euro which is a market positive, I don't know which came first, the chicken (Euro) or the egg ($USD). I see no reason for Euro strength, so it is possible there's some WE rumor in smart money land, but that's just wild speculation based on a few observations at this point, but I want you to know what is in my head as possibilities.

For practical purposes, it seems the EUR/SD will strengthen very soon (maybe overnight) and this should be market supportive. The charts in the two currencies aren't exactly the mirror opposite that confirmation would demand, but there are different issues in each so there's a little difference here and there, but the trend overall is what is important.

This is a comparison between the Euro (E) and the $USD (U) in various timeframes

 E 1 min

 U 1 min

 E 2 min

 U 2 min


 E 3 min

 U 3 min

 E 5 min

 U 5 min

 E 30 min

 U 15 min

 U 30 min

 E 60 min

 U 60 min

E 4 hour

If anything, it looks like whatever the catalyst is, it's going to move the currencies which will move the market