On Friday ETF provider Factor Advisors sent around this nugget: the correlation between large-cap U.S. stocks and the U.S. dollar, on a 90-day basis, has reached the most negative it has been in about a decade — a negative 0.85.The Japanese yen and Swiss franc have also been moving at “extreme” cross purposes with U.S. large-cap stocks, or those tracked by the S&P 500 SPX, it noted.Monday’s action was a casebook example of the binary mode that has dominated markets for long stretches of the last three years. It was classic “risk off,” which in today’s world means the dollar rallies and U.S. stocks, commodities and even gold tumble.The S&P 500 SPX sank 1.5% while the dollar index DXY shot up  1.2%. The yen EURJPY rallied 1% against the euro. The shared European currency, for its part, lost 1.4% against the dollar EURUSD. The British pound, which Factor Advisors notes has also shadowed stock moves, dropped 0.4% GBPUSD.According to Factor Advisors, the euro’s easing alongside stocks is par for the course. The relationship between the euro and the S&P 500 shows a 0.84 positive correlation over the last three months, says the firm’s analysis.  With the week’s calendar dominated by macro events (FOMC meeting, etc), it seems little will check the tidal forces governing markets anytime soon.

Originally from MarketWatch