The S&P 500 is up 0.2% to a fresh record high at 1629. The index has now gained in 5 consecutive trading days and 12 of past 14 for a cumulative 5.7% rally.

A one or two-day correction is overdue and a miss in tomorrow’s initial jobless claims or Friday’s retail sales report would probably do it.

SP500 daily chart May 8, 2013

I would look to a return to 1600 before the gains resume.

Alternatively, the highest correlations with stocks in the past month and this year is AUD/JPY. That chart doesn’t look particularly interesting at the moment but it’s a trade that’s packed with fast money traders who are probably nervous after the RBA cut.

In mid-April, when the S&P 500 fell 2.5% in a two-day correction, AUD/JPY fell more than 500 pips.