Someone wrote me today expressing concerning that the EUR/USD was getting near the bottom of its channel, which would mean the little bit of bear-love that the market has been providing is ready to, once again, end.
Well, I can understand the concern, which is why I have a large long position in FXE as a hedge. Here's the EUR/USD channel:

I'd like to point out, though, that the correlation between the EUR and the SPX isn't perfect. Sometimes they are in sync, and sometimes they lag. Take this summer, for instance. The Euro bottomed in early June (circled below in green). The equity markets didn't bottom until a month later (circled below in red). There was a big spread between what the Euro was doing and what the S&P was doing, tinted below in blue, and we're seeing that again.
What we could see, as we did this summer, is the Euro "drag" the equity markets down for weeks to come. It's anyone's guess. Until then, I remain hedged – – currently about 25% long/75% short. This will continue to "water down" any gains from days like today, but it'll also mean that an equity rally won't kill me.
That's it from me today. I'll see you Wednesday morning.