the JPY and a “high probability” 4th wave triangle … not good for stocks
Folks, going to point you to a post that my “boy” ( he says that a lot, not sure why – must be a Cuban thing?) wrote about the YEN and it’s importance to the US Equity Market: http://allstarcharts.com/why-yen-is-the-most-important-chart-for-us-stocks/ . If your not one of the 50K+ following him on stock twits you should.
When I was an instructor for the CMT III course we would have a bunch of people go online from all over the world – it was cool. As the market was cracking in 2007-2008 I would play Led Zeppelin “when the levy breaks” before each class. There was one dude who would be all out of breath and I would ask – what the hell are your doing man? The reply – “going for a run in central park listening to an audio book on technical analysis and CMT III”… that’s JC. Enough said.
After you digest his blog post, if you still feel like it, take a look at these two charts. My thesis – we have completed a pretty big high on the USD vs JPY. Do a search on the YEN on my post and you’ll see I’ve been following this count pretty well. Why is that important? Well, because it’s time for true confessions …
See the little yellow arrow on the first chart below? (boxed in w/ blue background?)
I GOT STOPPED OUT AT THAT LEVEL TRYING TO GO LONG THE USD VS JPY. I GOT STOPPED OUT BY 7 PIPS …
THAT PUT ME INTO MY FIRST EVER DRAWDOWN IN 10 YEARS AND, WELL, WELCOME TO A TRADER MEETS CRYPTONITE …
NEEDLESS TO SAY, I’M INTERESTED IN THE USD VS JPY … 🙂
So, to the charts …folks, I like this count. I don’t see it going much higher and, according to the rules I taught in CMT III the previous wave 4 of a lesser degree is a target. Ummmmm, that’s around 100. In currency terms that is HUGE. (Kind of like the quadrillion of derivatives outstanding)
So (saw that Peter Gabriel concert where he played it exactly like the CD – more on that later) if were correct here AND the correlation w/ stocks remains in tact THEN equities are going to have a tough time.
To the charts …
You can see (chart below) that I am labeling it A-B-C (we just finished triangle 4 w/ a 5th wave to come) for now because the uptrend is so powerful … the probability is that we will see a new low below 116 on the USD vs JPY. At that time … we’ll take a look at labeling this A w/ B-C to come or correction complete. For now, if we break that lower trend line below, consider another move lower and therefore weakness in stocks over the coming weeks.
Let me know if you have any questions.