Interesting how tight this correlation has become lately. I have removed the labels to allow you to focus on the visual only at first look. Can you name these two price series?
If you said Dow Jones Industrial Average and Japanese yen, you nailed it! Below, DJIA is in black (right scale), the USD-Japanese yen in blue (left scale):
Now take a look at the same relationship, around the same time of year back in 2011. Back then, USD-JPY peaked in early April and led US stocks lower; eventually dragging the Dow down about 2000 points into September 2011 where it bottomed:
You may be asking: Well, what about 2010? Well, we saw a similar pattern back in 2010 also! USD/JPY topped in early May, the market topped in late April, both moved sharply lower together:
Just saying … stay tuned!
“I grieved to think how brief the dream of the human intellect had been. It had committed suicide. It had set itself steadfastly towards comfort and ease, a balanced society with security and permanency as its watchword, it had attained its hopesto come to this at last. Once, life and property must have reached almost absolute safety. The rich had been assured of his wealth and comfort, the toiler assured of his life and work. No doubt in that perfect world there had been no unemployed problem, no social question left unsolved. And a great quiet had followed. It is a law of nature we overlook, that intellectual versatility is the compensation for change, danger, and trouble. An animal perfectly in harmony with its environment is a perfect mechanism. Nature never appeals to intelligence until habit and instinct are useless. There is no intelligence where there is no change and no need of change. Only those animals partake of intelligence that have to meet a huge variety of needs and dangers.”
– H.G. Wells, The Time Machine (1895)