For many investors, today marks the end of the year, but it is ending on a favorable note. The combination of the FOMC meeting and the SNB adoption of negative interest rates underscored the dollar and equity bullish divergence theme. 

It struck us that too many people were doing all kinds of mental and verbal gymnastics to account for what was a technical move. The correction, which came after a strong six-week trend move, lasted a week, December 9-16. The S&P 500 and the Dow Jones Stoxx 600 have both recouped around 70% of that downdraft.

The euro peaked near $1.2570 on December 16 and has not been able to resurface above $1.2300 for nearly 24-hours. With the SNB's move, effective the same day the ECB's meeting, January 22, is no coincidence. Just as the market is feeling more confident in a rate hike by the Fed near mid-2015, it is feeling more confident of a broader asset plan from the ECB. The euro is holding a little above the low set on December 8 just below $1.2250. In the thinning holiday markets, moves may be exaggerated, but now it seems asymmetrically so to the downside.

The dollar peaked against the yen on December 8 near JPY121.85. The violent correction ended in front of JPY115.50, a key technical retracement level of the dollar's advance from both October 15 and October 31. The JPY119.50 high the dollar has recorded today corresponds to a 61.8% retracement of the dollar's decline over the past week. A move above there would suggest a return to the highs and beyond.  

Ironically, today's dollar gains against the yen come as BOJ Governor Kuroda seemed to express concern about the pace of the recent moves.  It was practically a forgone conclusion that the BOJ would not alter policy or break new ground at its last meeting of the year. The Nikkei gapped higher yesterday and today. It closed on its highs and appears poised to test the high from December 8 a little above 18000.