Not quite perfect mirror images, but pretty close. We have the S&P 500 Index Futures (top) and Yen/Dollar (bottom). Note that Yen strength has been associated with U.S. stock weakness, as it becomes more expensive to borrow the cheap, lower-yielding currency to purchase higher yielding assets. This morning we're making multi-day lows in the Yen, and the S&P 500 Index is knocking at the door of the top end of a several-day range.
The other intermarket relationship I'm watching is oil. Hints of resolution in the Iranian detention of British sailors would take some risk premium out of energy and should support stocks. Continued price strength in oil (we've already risen about 10% in the last two weeks) would not only take a toll on the economy, but also signify further geopolitical tensions.
When you're in a trading range and contemplating a breakout, it helps to stand back and see where the market stands vis a vis the big global/macro influences. Trader sentiment governs the next few ticks, but shifts among world economies create trends.
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