why we need to watch the Japanese Yen …

full disclosure … check out this chart below.  this is where I was stopped out of a LONG USD vs the JPY.

this game is really hard, if you make it.  As my mentor and friend Larry Pesavento says – “trading/investing isn’t hard, but it sure isn’t easy.”  I was pretty cocky 7-8 years ago when I was sitting in Larry’s trading room.  I asked him “what do you consider a good month?”  He sat back, looked at me and stared me directly in the eyes and said “if I make 1 cent.”  I laughed … little did I know that one sentence was the most profound statement I would here ….. no kidding.

so how do you get in this move … ? well, you WAIT for the opportunity to come to you.  If you look at the line in the sand – 10/28/2011 – you’ll see the “SEED DNA” that started this move.  The entry to get in the move occurred roughly a YEAR later …. the triangle shown below was 6 months in the making.  the consolidation was 6 months in the making …

so, let’s take a step back and simply allow the YEN to come to US.

Main20141108165512

 

where are we now?

  • the low on 10/28/2011 was a big old 5 waves down from the HIGH in 1972.  We have TONS of room to go ….
  • sure looks like we are in the 5th wave of the first wave UP in this market.  So … I just can’t go LONG $$$ vs JPY yet.  Have to wait ….here is the picture

Main20141108164000

I see a 5th wave in progress w/ some serious thrust telling me this 5th wave is going to extend.  Note, used the POWERFUL technique of the 1/8 subdivision (work w/ me – it’s musical and based on sacred geometry) and we just hit the .375 (3/8) subdivision. This was taught to me by Mike Jenkins of http://www.stockcyclesforecast.com) and is one of the most powerful projection techniques out there …

Main20141108171147

so, now, we take a look at the Nikkei 225 …. a 3 drives to a top is present:

Main20141108171511

Main20141108171743

 

so, why are we doing all this work? Well here’s the cliff notes folks, as described by mentor and friend Larry P:

  • Last Friday, the BOJ unexpectedly boosted its annual target for expanding the monetary base to 80 trillion yen from 60 to 70 trillion yen while Japan’s Government Pension Investment Fund, which holds about $1.1 trillion in assets under management, increased its allocation to Japanese and overseas equities to 25% each, up from 12% each, and cut down its domestic bond allocations to 35% from 60%. [BOJ Boosts Japan ETFs]
  • On their own, each announcement would have been likely to drive some new cash to Japan ETFs. In tandem, those headlines have stoked a massive amount of inflows to an array of Japan ETFs, including the largest listed in the U.S., the iShares MSCI Japan ETF (NYSEArca: EWJ ) .
  • Since last Friday, EWJ, the largest single-country ETF, has added nearly $560 million in new assets while volume has frequently been triple or quadruple the daily average, according to BlackRock data.
  • This unprecedented move places the Japanese people in a precarious situation. Should this SELL OFF it most probably will bankrupt the country. Frankly, nothing surprises me these days but something happened very unusual in the Japanese market this week. Immediately following the announcement the ETF for Japanese shares E WJ spiked up as the Nikkei Dow was rising. Then after one day it collapsed and went below the September lows.
  • This is highly unusual because this should correlate about 90% of what happens with the Nikkei Dow. Everyone that bought these ETF shares is now at least 10% or more underwater and as you can see by the three drive to a top pattern in the Nikkei Dow on the long-term weekly charts it can get quite scary from these levels.

Main20141108173637

 

Folks … batten down the hatches.  The BOJ went “all in” and the outcome (I DO NOT know which way it will go) will be incredibly important on the global stage ….

continue to make it a great weekend …

 

Bart

2 Comments on “why we need to watch the Japanese Yen …

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