Yesterday, for no particular reason, I decided to look at how the AUD/JPY stacked up against the S&P 500. I was completely stunned by the result.
For years on end, in a relatively normal market, these two instruments were in virtual lockstep. It's actually quite freaky. Then, after the tragic September 2010 Jackson Hole insanity, these two disconnected.
There is still a gravitational pull, but one glance at the chart shows you where the S&P has been levitated thanks to Bernanke's shameless cheating (blue line) versus where it should be if the market were not so obscenely mutated by trillions of dollars of Fed manipulation (white line). Suffice it to say the market is quite overvalued.
