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From a monthly basis, the U.S. Dollar created another large bearish wick along an 8-year resistance line at (1) in the chart above. This might surprise a few investors as the Dollar is a popular investment choice right now, as 77% of investors are bullish the US$. The combo of the wick at resistance and 77% bulls, increases the US$ remains soft for a while (Soft US$ post here)
On the flip side, the Yen is down 20% over the past year, driving it down to its Fibonacci 38% retracement level and sentiment is very low at 22% bulls. The US$ and the S&P500 have been correlated over the past two years (not the traditional love/hate relationship), while the S&P 500 has been non-correlated to the Yen.
Should the US$ continue soft and the Yen rally, look for the S&P 500 to follow the action of the US$! A soft dollar could benefit Gold, Silver and put a smile on the Miners faces! (Miners reason to smile)
Premium Members are owners EWV (2x short the Nikkei) for over a week now. EWV is up over 22% in 8 days thru last Friday. See why members are short the Nikkei in this you tube video interview with Phil Pearlman, executive editor of Stock Twits (see interview here).
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