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Correlation Lost. This can't end well

FX:SPX500   S&P 500 index of US listed shares
66 1 2
Correlation Lost. This can't end well
As can be plainly seen, this pair has always converged historically. The question is: which is leading at this point? Will the yen fall against the dollar, or will the S&P move downwards? I don't see the Nikkei gaining much momentum, and with the BOJ's policy of late, I can see the yen continuing to make additional gains against the dollar. In addition, the S&P has been trading right on the 200-Day moving average, with no significant close above it. We are also right at or below the 50-Week moving average. With the recent loss of S&P momentum in the upwards direction, along with it bumping at these two significant resistance levels, I predict a bounce off and back down in the coming days if we can't make any additional headway towards 2100. The S&P has had a nice relief rally and is due, at a minimum, for a meaningful correction.

Of course, the middle ground would be for the market to move slightly downwards and the yen to move slightly downwards against the dollar to meet in the middle. In either case, I think that the S&P has limited upward potential in the short-term outlook and a more likely outcome would see a move to the downside.
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