Currency Analysis

Despite today's move up in the market while the $USD also moved up and the Euro moved down, most of the time, the correlations hold and they are exactly the opposite of what happened today, but as I mentioned, "When Wall Street sets up a cycle, there's little that gets in their way that keeps them from running it". If we look at the 2 days we lost this week, it seems the market had to be sent higher no matter what, even if it broke all legacy arbitrage correlations.

Yesterday we used the Euro to give us a probability that the market would see at least early strength, we are going to look at both the Euro and the $USD, just remember they move opposite each other and a strong Euro/weak dollar helps the market, a Strong $USD/weak Euro hurts the market.

From a look at what we have, it doesn't look like we have early probabilities of a gap up in the a.m., but it does look like we will see strength build in later and the signals for a volatility move higher shaking out shorts that we have seen in many areas, is also seen in both of these. Finally, we want this move higher to short sell in to strength at better prices and less risk, the two currencies seem to confirm this also, that the move up is limited, although it may look very strong, the long term probabilities are very bearish and that's why we want to short any price strength.

I'll post the charts next.