I’m taking a stab at USDJPY’s likely course tonight, given what I expect to be disappointment over the BoJ’s QQE actions (or, lack thereof.)
We left off earlier this afternoon with this chart. It seemed a little silly at the time, given that the pair spiked into the US equity close. But, of course, that close was all about ensuring a positive day for SPX, courtesy of the (still occasionally effective) yen carry trade.And, you could see it coming from a mile away. SPX was sliding, after having bounced up to backtest the SMA5 200 and a channel top……when suddenly — and I’m sure quite by coincidence — USDJPY started spiking. The pair not only broke a trend line connecting yesterday’s phoney-baloney spike, but soared out of the falling white channel for good measure.If that weren’t enough, VIX picked that exact moment to take a dive.And, wouldn’t you know it, CL decided it was a great time to pop up out of the falling white channel it’s been locked in (except for yesterday’s clumsy, but effective, ramp job) for over a week. Instead of continuing lower, SPX spiked up through the channel top and its only remaining moving averages. Mission accomplished — for the eleventy billionth time this year.Given that stocks are still susceptible to USDJPY’s gyrations over a year since USDJPY topped out, and given that the BoJ has painted themselves into a corner so tight that not even Picasso could find a way out, what does the path ahead look like?
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