The FX-factor: Update

This morning I posted about the interesting fact that the stock market has rallied sharply while the Euro--usually coupled with it--barely moved up at all.

Just after posting this thought, the Euro pulled back relatively sharply off the resistance levels I noted. The US dollar bounced as well. At the same time, the market pulled back sharply, as you'd expect, before floating back up for the rest of the day.

FXE (candles) with SPY overlayed (line)

 As you can see, the decoupling continues. The FXE is pulling back while the SPY pushes up. It's only a matter of time before one or the other gives and either the market falls with the Euro or the Euro breaks up and joins the market.

Tonight I'll be watching the Euro and US dollar futures. If the Euro fall/USD bounce continues, the market will have a difficult time pushing up under any kind of heavy volume.