FX

FX is strange as well this a.m.

The last (nearly week) and last night I posted the correlation between the $USD and the market, this morning it is a bit strange...

In the "Pre-Market post" I said this about the $USD 1 min chart as of the time of writing (just before the open)...

"The $USD looks like it will have an early pullback effect on the market, but the 5 min chart is worse so that effect that is on the 1 min USD chart is capped and likely for the open."

Below is the $USD vs SPX 1 min chart...

 You can see the recent and normal correlation between the two right up to yesterday (USD is green) and the early strength in the 1 min $USD chart.

According to the correlation the SPX (red) should be moving lower, that's exactly what I said pre-market. The fact that the SPX has moved almost against the correlation, at first glance appears to suggest the market is a bit stronger than it should be (as the $USD up this a.m. normally means the market pulls back".

 This is the 1 min $USD chart, it looks like it will pullback soon, that should send the market higher, "should" but this is one of the curiosities in the market this morning as the SPX is not responding with a weaker move, but rather a stronger move.

The market's correlation with the 1 min Yen above is almost 1:1 meaning the market now tends to move with the Yen, this chart suggests early pre-market weakness in the Yen will soon see a move to the upside.

Both charts would suggest the market see some strength as the currencies react to their divergences, it is strange however that the SPX has broken ranks with this correlation that has been nearly perfect for a week, my first impression would be that the SPX is stronger than it appears right now, but I don't have solid objective evidence of that right now, as mentioned in the last update, the averages are a bit scattered. I'm going to try to see why that is.