Currencies continuing to stretch toward retracements - or new extremes

It's interesting that, despite the inverse correlation between the U.S. dollar index and equities, that the dollar has retraced more than 62% to its low - while the euro (also inverse to the dollar index) has moved a similarly large amount - most equities indices haven't moved more than 50% back to their highs. So for U.S. equities, it seems the gains are diluted by the dollar's relatively greater weakness. Below, underneath the charts of yen (daily), euro (weekly) and dollar (monthly), I've added weekly and monthly views of the SPX "valued in euros" meaning as a ratio to the euro. This factors out the dollar's weakness to show the picture of what equities have gained or lost, separated from dollar weakness. But - the main point of this post is to point out that the yen has re-tested the important $111.49 pivot. I'm expecting it to work off this resistance and move higher above the pivot again. As for the euro and dollar - both look like they're facing another wave that should extend one more time, before they reverse trend. I've borrowed the euro chart from Tony Caldaro's site (always included in the list at right - thanks again, Tony!), which is labeled (apparently by a student or trading friend of Tony's) as readying for a last wave v of 5 up. It's reasonable to think that will go along with another finishing rally for equities (and dollar drop) over coming days.

These SPX:Euro charts are a different way of seeing the SPX. Aside from the obvious diminution of the 2007 "highs", it's also interesting, on the monthly you can see the SPX is now just testing the candle body of the 2003 low. Sobering!