The $AUD

As many of you know I keep track of the Australian dollar as it is a leading indicator among currencies due to its carry trade currency status and due to its reflection of the Asian condition. With last night's comments from Japan cutting their assessment of the economy and seeing funding drying up, combined with disappointing Australian Home sales, the $AUD has been hinting at a top for more than a week, now take a look at the currency.

Even with a plunging dollar today (short term positive for the market)...

And a surging Euro today (also good for the market short term)...

The currency that tells us more about the market than any, the $AUD can't manage any gains today.

 $AUD loss overnight despite the drop in the dollar...

And the bigger picture of a divergent $AUD vs the SPX.

I don't expect you to understand all the subtle hints I'm putting out there, but a drop in the dollar today and a rise in the Euro are both short term trade markers, both good for the market to rise short term, but the $AUD is a longer term marker, one that shouldn't be ignored as it has called every reversal this year and every one I can remember since we started tracking it, this is the big picture and fits well with our expectations.