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Continued Weakness in Euro Bonds and Declining Euro Currency Point to Stocks Moving Lower

There has been quite a remarkable correlation between the US$/EURO moves and the moves of the US stock market.  It does make sense in that a higher dollar means lower US exports, but the correlation lately has been quite remarkable.  With the Euro challenging its October lows, with no end to the political wrangling in sight, it appears that stocks are well on there way to the October lows too, and perhaps a break even lower that shortly after.  Frankly it appears the only thing that could put that move off would be an announcement of QE3 at the December 13 FOMC meeting.  Another trend to watch will be that of the debt of the more stable sovereigns.  I recently noticed that the Vanguard Total Bond Market (NYSEARCA:BND) hasn't really rallied much in the last couple weeks even in the face of declining stocks.  It might be time to short bonds as I feel that bonds are really the last bubble in this series of bubbles that we have had beginning with the stock market bubble of 1999-2000.  Stocks are pretty oversold so there is a chance we might bounce for a bit in the near-term, and we may get a big bounce if QE3 is announced, however, longer-term all the signs point down for stocks.