Today the S&P 500 was up 1.65%, but considering that the dollar was down 1.26% vs. the Euro, if you were a European investor in the US market, you hardly realized any gains–such is the power of currency. Much like how perception of physical motion is defined by one’s frame of reference, motion in financial markets only meaningful relative to the value of the currency of reference. Gains and losses in markets, measured in currency, can be completely illusory based on the change in value of the currency itself. To illustrate the point, the chart below is a chart of the S&P 500 as viewed by a European investor, measured in Euros. It’s a completely different picture than the one that we’re used to seeing, primarily because 2007 never reached the peak of 2000. Bull and Bear markets happen over different time frames. Technical levels become completely different. Simply rebasing the unit of measurement can alter the interpretation completely. YTD the S&P 500 is up 15% in Euro terms compared to 8% in USD.