SPX closed yesterday at exactly the bottom of its rising channels — this after a dramatic reversal at the upside target we forecast earlier in the morning:
SPX looks likely to reach the purple .886 at 1983.17 — also the bottom of the original falling gray channel.
The talking heads offered many explanations. But, as usual, they left out the most important: the yen carry trade.
USDJPY had surged past the key .618 Fib at 120.11 and even topped the SMA200, with SPX tagging along behind, wagging its tail. When USDJPY faltered and dipped back below the SMA200, however, the rally quickly came undone — just like it did early this morning. Equity markets are not amused. continued for members…
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