That was all the yen carry trade algos needed to hear. USJDPY reached our initial upside target with ease, and is threatening to keep going.
I highlighted the after-hours trading to make it perfectly clear where most of the upside has come from lately, and this latest “breakout” in particular. With the help of USDJPY, CL and VIX, it’s just not that difficult to ramp the futures higher.
The real test comes when the volume ratchets up, and the meager few carbon-based investors remaining have an opportunity to assess things. Lately, they have called BS on the overnight ramp jobs — but have been unable to follow through.
It almost came together yesterday, but VIX’s 10% plunge from its overnight highs and CL’s reversal from its breakdown (the red trendline below) combined with USDJPY’s spike to salvage the H&S necklines yet another day.Will today be the day?
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