The S&P 500 is Overdue for a Sizable Correction\u2026And So is the Aussie Dollar!<\/strong><\/p>\n Then when you apply Elliott Wave analysis, you can see that the S&P 500 has already completed its \u201c5 waves up\u201d pattern. Now it\u2019s time for a \u201c3 waves correction\u201d downward against that uptrend. In fact, you can look at the yellow arrow on the chart to see how this may play out.<\/p>\n While the overall, long-term uptrend in stocks is probably not over\u2026a major correction is still \u201cin the cards\u201d for the near-term. As U.S. stocks correct severely in the coming weeks to months\u2026the Aussie dollar will follow suit and do the same.<\/p>\n As investors bail out of riskier assets and scamper off to the sidelines, it will actually benefit the U.S. dollar at the same time.<\/p>\n Oh sure\u2026in the end, the buck is toast, but our dollar does catch some occasional breaks along the way, particularly when stocks fall and investors run towards defensive, risk adverse assets like the greenback.<\/p>\n Both of these dynamics at work at once really \u201cdoubly\u201d hammers the AUD\/USD pair and causes it to tumble lower.<\/p>\n Long-term, Australia still has great fundamentals and its dollar will do great over time. But anything can get overdone in the near-term and right now the Aussie dollar and the S&P 500 are both poised to tumble very soon.<\/p>\n Then once the dust settles and both of these have had sizable corrections\u2026their long-term uptrends will likely resume. But not until its shaken out the \u201cweak hands\u201d in the market first.<\/p>\n Sean Hyman<\/p>\n http:\/\/wcw.worldcurrencywatch.com\/<\/a><\/p>\n![\"\"](\"http:\/\/wcw.worldcurrencywatch.com\/files\/2011\/02\/1.jpg\")
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