USDJPY looks like it will complete the Bat Pattern (red) with an .886 retrace of its post Mar 7 drop.
A pullback here (at 103.46) would coincide nicely with the Nikkei 225, which (yesterday) reached the .618 retrace of its drop from channel support. It has been back-testing the channel for over two weeks.
From a technical standpoint, this won’t necessarily trash the harmonic or the yellow H&S Pattern. A double-top is a legitimate retracement in harmonics. And, the height of the right shoulder above the neckline relative to the head is technically more important than whether it tops the head in nominal price.
Yet, psychologically, the bulls will have made their point and busted the smaller, red H&S. Whether prices break out or this is a muppet trap, much damage will have been done.
UPDATE: 11:10 AM
So, SPX made a new high, topping the Mar 21 level by 0.64 points. While three new highs in the span of one month is impressive, I think it’s wise to remain cautious. SPX had three new highs in the span of 11 sessions in Mar-Apr 2012. It even featured a big-time overnight ramp job to push past the .786 at 1381.50.
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