In the chart below, which was posted on 8/29 (see post), I suggested a “game changer” was about to take place, with a rally in stocks, due to the pattern in the Euro/Yen. Since that post the 500 index is up almost 7%!
Now what? First off… I started working on this chart at 5:15 a.m. (central time), so the day is far from over and I am still on my first cup of coffee!!! Falling wedges are bullish 65% of the time, so a rally out of a falling wedge isn’t a surprise. Humbly the size of this currency breakout did surprise me to some degree though.
Unless history changes, the rally in the Euro/Yen is suggesting higher stock prices.
I find the timing of this upside breakout very interesting with the 500 index at the very top of the multi-month trading range/resistance. Euro/Yen is suggesting a NEW LEG HIGHER in equity prices!
Game plan…Keep your ticket to ride as well as keep stops in place!