SPY Disconnects From EUR/USD

For the last year all you had to do was look at the EUR/USD to see how stocks were doing.  Since the last few weeks of the year this correlation between the Euro and stocks has disconnected.  While the Euro gets trashed stocks somehow pull higher these days.

 

Look at the chart below.  Suddenly stocks don't care what the Euro is doing.... or do they?  Could this be early 2012 euphoria ramping stocks, while the EUR/USD represents current reality?  Are stocks going to catch up with the EURO or is the EURO going to catch up with stocks?  Perhaps the SPY and EUR/USD have parted ways forever?  I highly doubt it.  At some point this correlation will become relevant again, perhaps as soon as tomorrow or next week.  I do think its worth noting this move and the fact that stocks are moving higher regardless of currencies and outside developments.

Stocks are like those horses in Central Park with their binders on.  They know what they have to do, but its not what they really want to do.

For the full chart click here: http://images.investorshub.advfn.com/images/uploads/2012/1/6/pjdyceurusddisc.png

 

Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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