I'm right here with Big on this. Currencies IMHO trade in ranges...currencies fluctuations/trends show how big money is moving and correlations can be very tight in short to mid term time frames (and even in some longer term timeframes of course).
However, very currency comes to a logical bottom...the markets then react very negatively (especially if the markets have been negatively correlated to that point), but once that gyration/consolidation is over, then you generally get a reversal in this previous trend.
The US Dollar to me is getting very close that (and already exhibiting some signs that it is reversing the negative correlation it has had with the markets). This always takes time to play or trade out, but it looks to me that this is what is happening with the USD (e.g., over time we are getting more and more to where positive moves in the US Dollar will be correlated to up moves in the market).
I don't think we are there yet in terms of a good to great correlation, but I think we are seeing many signs of this type of reversal in the Market to USD correlation that we have seen in the past. Mike
