Today's stock market price rise was in accordance with the  rise in the EUR/USD, which as has been firmer during the overnight US session (the morning european session) and did not close below the potential bearish level of 1.4160. The rise of the stock market is therefore not surprising given the position correlation between the stock market and the eur/usd pair.

The rise in eur/usd has been attributed to an extention by the French of the maturity of Greek bonds. This seem to have been on the french size with no real commitment from the greek side. Is it politically motivated, or are the french knowing something others do not know, and decided to extend the maturity of the bonds, so to hopefully get their money as compared to facing a default in a nearer future, and the consequence that may go with it.

EUR/USD is currently trading at the 1.4275 area. It has to clear the 1.4310 area as a first hurdle, and then the 1.44 area as a second hurdle, before one might consider the last  the price rise in eur/usd could be considered as a potentially more serious one for the bull side of EUR/USD. The 1.44 eur/usd is less than +1% from current the price of eur/usd, and is therefore within a day or two of eur/usd realized volatility, if the implied volatility is indicative of future volatility. We note that the financial news indicates that two days from today (Today is Monday) would see the Greek's parliament debate of and decisions on the austerity measures. The eur-usd currency market seems to be well in "tune" with the real events.

The passe of time would allow the bull and bear  territorie of eur/usd to come closer. They are currently at around 1.44 and 1.4160. A close higher than 1.44 would be non-bearish, and close  below 1.4160 would be non-bullish.

If the eur/usd were to go down and the stock market were to follow, the stocks of companies that might attack the attention of the stock bears are the kind of stocks that close in the red today while the stock market rose. Such stocks might be sending messages of risk on the long side. A list of such stocks from the SP500 index is included below.

In conclusion a rise of EUR/USD accompanied with arise in the stock market would not be a surprising outcome, but a rise of eur/usd above 1.44 is a next real test of eur/usd and  it correlation with the stock market.

Ticker Company Sector

MOLX Molex Inc. Technology

BBY Best Buy Co. Inc. Services

BRCM Broadcom Corp. Technology

NVDA NVIDIA Corporation Technology

DV DeVry, Inc. Services

BMY Bristol-Myers Squibb Company Healthcare

ATI Allegheny Technologies Inc. Industrial Goods

SHW The Sherwin-Williams Company Services

OI Owens-Illinois, Inc. Consumer Goods

GME GameStop Corp. Services

MMI Motorola Mobility Holdings, Inc. Technology

NWL Newell Rubbermaid Inc. Consumer Goods

GLW Corning Inc. Technology

NBR Nabors Industries Ltd. Basic Materials

MRO Marathon Oil Corporation Basic Materials

TLAB Tellabs Inc. Technology

KR The Kroger Co. Services

WDC Western Digital Corp. Technology

DVN Devon Energy Corporation Basic Materials

BTU Peabody Energy Corp. Basic Materials

RSH RadioShack Corp. Services

APC Anadarko Petroleum Corporation Basic Materials

DRI Darden Restaurants, Inc. Services

MA Mastercard Incorporated Services

WFR MEMC Electronic Materials Inc. Technology

XRAY DENTSPLY International Inc. Healthcare

COL Rockwell Collins Inc. Industrial Goods

MUR Murphy Oil Corporation Basic Materials

LOW Lowe's Companies Inc. Services

RRC Range Resources Corporation Basic Materials

DD EI DuPont de Nemours & Co. Conglomerates

PCG PG & E Corp. Utilities

SWN Southwestern Energy Co. Basic Materials

MON Monsanto Co. Basic Materials

SLB Schlumberger Limited Basic Materials

DOW The Dow Chemical Company Basic Materials

DHR Danaher Corp. Conglomerates

DO Diamond Offshore Drilling Inc. Basic Materials

WPI Watson Pharmaceuticals Inc. Healthcare

AVP Avon Products Inc. Consumer Goods

BSX Boston Scientific Corporation Healthcare

KFT Kraft Foods Inc. Consumer Goods

ERTS Electronic Arts Inc. Technology

EXPE Expedia Inc. Services

BBBY Bed Bath & Beyond, Inc. Services

PPG PPG Industries Inc. Basic Materials

WMT Wal-Mart Stores Inc. Services

AIZ Assurant Inc. Financial

FHN First Horizon National Corp. Financial

VMC Vulcan Materials Company Industrial Goods

NUE Nucor Corporation Basic Materials

ROP Roper Industries Inc. Technology

STZ Constellation Brands Inc. Consumer Goods

SWY Safeway Inc. Services

NSM National Semiconductor Corporation Technology

GS The Goldman Sachs Group, Inc. Financial

APOL Apollo Group Inc. Services

CAH Cardinal Health, Inc. Services

HCN Health Care REIT Inc. Financial

VFC V.F. Corporation Consumer Goods

FRX Forest Laboratories Inc. Healthcare

MO Altria Group Inc. Consumer Goods

YHOO Yahoo! Inc. Technology

IFF International Flavors & Fragrances Inc. Basic Materials

CEPH Cephalon Inc. Healthcare

CLX Clorox Corporation Consumer Goods

CL Colgate-Palmolive Co. Consumer Goods

MRK Merck & Co. Inc. Healthcare

CAM Cameron International Corporation Basic Materials

CHK Chesapeake Energy Corporation Basic Materials

UNP Union Pacific Corporation Services

TAP Molson Coors Brewing Company Consumer Goods

FMC FMC Corp. Basic Materials


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