Can stocks rally in the face of a rising yen? We should find out today, as USDJPY reached our second downside target overnight. As we discussed in Tuesday’s members section:
The BoJ would love to morph USDJPY’s fluctuations into a (less aggressively) rising channel, but that means including some tags on the lower Fib levels such as the red .618. They’re more likely to chicken out at the rising red TL and purple .236 at 119.27 — especially if SPX is tanking.
Stocks might have tanked, but most of USDJPY’s downside was saved for the after hours, when ES is more easily manipulable. All the same, SPX came within 1.73 of our 1989 target in the members section of Pennant no More.
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