Euro Versus Crude Oil Versus SPX Daily Chart

The chart shows the movement in the euro/dollar (blue), crude oil (green) and SPX (red). Looking at the blue and green, notice how crude oil direction leads the euro direction. Thus, if you see weakness in oil, the euro should follow along weaker in subsequent days, or visa versa for the upside. In 2012, the three parameters moved coincidentally, all peaking about the same time, pulling back in the same time frame, etc.... The pink circle shows a change when the fiscal cliff resolution occurred on 1/1/13. The euro was moving lower but in the States the bulls started buying on the political can-kicking news and new money typically moves into the markets to start the year as well. So oil and the SPX catapulted higher in January. The relationship with the euro then continues after the adjustment at the start of the year.

Note how oil peaked and drifts sideways to sideways lower.  The euro followed lower next, taking the lead off of crude, but look at the SPX, the Energizer Bunny, pushing higher and higher and it is unknown if this is the peak in the broad indexes as yet. For comparison charts, the entities that deviate the most are the ones that then correct the greatest during the reversion to the mean, so SPX should correct more in percentage terms moving forward. Crude oil as well. Projection is for all three to trail lower with the SPX peaking and selling off. Watch crude oil movement as a key indicator for markets. Crude lower means the broad markets move lower, crude higher and the broad indexes move higher. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.