The rally in the Euro/Yen has truly been impressive over the past 5 weeks, helping to push commodities and stocks higher. The first of September I felt that the pattern in the Euro/Yen was the key to pushing stocks higher (see post here). Following the Euro/Yen breakout, the typical soft September was anything but soft, with the 500 index having a great month, up over 8%.
Now the Euro/Yen pattern looks almost the exact opposite, per getting closer to the top of its falling channel and creating a bearish wedge of late. Also keep in mind that “Trade-Futures.com” reported a couple of weeks ago only 5% dollar bulls! IF the pattern message in the Euro/Yen is correct, the dollar rallies and causes a few frustrations!!!
The pattern in the Euro/Yen reflects another reason to pull UP STOPS in Commodity and International positions RIGHT NOW!
Thanks for this info! Great observation.
One day doesn’t make a trend, yet for anyone interested, look at the single day pattern the Euro made today, at the FIB 61% retracement level.
Also of note, the Dollar, on potential support, created a pretty decent downside wick today, which often takes place at LOWS.
Currencies are the driving force for most asset classes… stay very tuned to what could be taking place here and now in the currency world!!!
I want to add that Euro is today right at the 61.8% retracement level from Dec-09 high to June-10 low.
One more non-market related reason I sold was due to an email my boss sent me about him buying gold….haha. When you start getting emails from people saying they’re buying, I start getting anxious. Once again, your charts have been great if not instrumental.
William…Yahoo! Way to go on the harvesting.
How does the saying go…Bulls make money, bears make money and pig go to the BBQ!!!
Have received numerous emails this morning about harvesting from the blog viewership. Again, great job William and others!
Thanks for the post, Chris. I just “harvested” the past few days some of my EEM and options on the GDX. At the rate gold is going up, you would think people are throwing their paper money out the window or burning it for heat. However, I did buy GE on yesterday’s move up.
(correction – 10 year Treasury note yield)…
Notice the correlation intraday between the EEM and FXE??? Much better correlations there, than with SPX.
Maybe because EEM is far more overbought compared to SPX right now. Not to mention, with Ben at work, SPX could be consider a safe haven compared to EEM! (Never thought I’d say that…)
Sell FXE for a couple days, at least… also, selling oil and oil companies… Where to go?
10 year bonds? !?!