The yuan is serving as a key tell about where other assets are going, particularly since the Chinese currency suffered a sudden plunge in a swift depreciation in August, according to technical analyst Rich Ross of Evercore ISI.
For starters, the yuan drop presaged a similar-looking fall in U.S. equities.
"Yuan strength equals risk-on," meaning that it rises alongside risky assets like stocks, Ross said in a Monday "Trading Nation" segment. That's why the chart of CNY/USD (the inverse of how the currency pair is normally shown, so that it is the same chart flipped over) "looks just like the S&P 500."
The comparison also works in the near term, as the yuan recently rose as China announced stimulus, just as the S&P has been rising. In fact, Ross reports that both charts have broken their 50-day moving averages.
Since the inverse yuan chart looks like the S&P 500, it is no surprise that USD/CNY looks just like the chart of the CBOE Volatility Index, or the VIX, which generally records market fear.
Since the yuan is a proxy for "risk-on" moves, it also should not be shocking that the chart of the yuan looks a good deal like the chart of crude oil.
"I think that this trend towards dollar weakness, yuan strength — that provides bullish implications for crude and risk factors all across the world!" Ross proclaimed.
The broad yuan read-through "makes a lot of sense in the sense that you think that the most important thing in the world right now is the Chinese economy. And if the yuan is a reflection of the strength or weakness in the Chinese economy, then of course all these things correlated make quite a lot of sense," said Boris Schlossberg, director of FX strategy with BK Asset Management, on "Trading Nation."
But more broadly, Schlossberg said that "we're now in a market where completely global factors matter to local markets, and I think that's a key takeaway that everyone should be paying attention to as well."