Lately there has been a remarkable correlation between the U. S. stock market and the Japanese yen. Investors may be able to take advantage of it if given the proper attention.

The chart linked to below compares the SPDR S&P 500 ETF Trust ETF SPY, -1.15% which represents S&P 500 to the ProShares UltraShort Yen ETF YCS, +0.03% which represents 100% leveraged inverse position in Japanese yen against the U. S. dollar.

The chart shows six incidents of a dip in YCS since December that also correlated with dip in S&P 500.

Please click here to see the chart.

In evaluating the chart, it is worth repeating that YCS in an inverse ETF. The point is that when the yen gets stronger, the S&P 500 dips. Only days ago, the yen was trading at over 105 yen to a dollar, as of this writing, it has strengthened to 102 range.

The current stock-market swoon also correlated with several other currencies. Unlike the stock market, currencies typically move in small ranges. A 1% move in a currency is a large one.

Weakness in China has caused the Australian dollar to plunge. As of this writing, the Aussie dollar is down 1.1%. The Argentinian peso has been devalued by 13%. This is the worst decline since 2002. The South African rand lost 1% to about 11 rand per U. S. dollar; this is a five-year low. The Turkish lira remains under pressure, declining about 1.1% in spite of reports of Turkish central bank intervening to support the lira. Along those lines, the Russian central bank likely intervened to support the ruble from further fall.

Movement in currencies gave us an early clue that led to our downgrade of 13 of the 15 emerging markets that we actively trade to mild sell on Jan. 13, 2014. This call has proven spot on.

The sum total of the foregoing is that investors are shunning risk and embracing safety. This is confirmed by strength in U. S. Treasurys. The chart of the leveraged inverse 20+ year Treasury bond ETF TBT, +0.64% illustrates the strength in U. S. Treasury bonds.

Please click here for the chart of TBT.

Of interest is the euro is staying firm against the U. S. dollar. For the time being, this indicates that the probability of the currency turmoil developing into a huge crisis is low.

Relationships between currencies have a predictive power for the U. S. stock market. This is one of the eight factors that go into the adaptive timing model at The Arora Report.

The sum total of the currency movements so far is that any market correction in the U. S. and Europe will be shallow. When this correction ends in emerging markets, it will be a buying opportunity for the long-term investor. However, it goes without saying that this conclusion can quickly change as new data comes in. In addition to the currencies, keep a close eye on the following ETFs: iShares MSCI Emerging Markets ETF EEM, -0.78% , iShares MSCI South Africa ETF EZA, -2.36% , iShares MSCI Turkey ETF TUR, -0.69% , Vanguard FTSE Europe ETF VGK, -0.80% , and iShares MSCI Japan ETF EWJ, -0.43% .

Disclosure: Subscriber to The Arora Report have a short position in SPY, one of the portfolios is 20% hedged, the conservative portfolio recently raised cash, and there is a long position in inverse Treasury ETF TBF.