Currencies, like commodities, sometimes will rattle around a retrace level and sucker you into believing that a move is over -- or going to reverse -- and then surprise you.
After the Yen went back through 101 many people believed it was inevitable, purely on a technical basis, that it would blow through the 103.73 level and head further onward, likely toward an ultimate area of 120 or so (which does have precedent, incidentally.)
That is now looking like a bad bet.
At this point you have to expect a move back to 94. And if that level does not hold then given the "overshoot" nature I would not be surprised -- at all -- if it targeted just under 88!
The Nikkei market was off 4% last night with the catalyst for both being an apparent shift toward addressing deficit spending. The cognitive dissonance between that and a claim that the Japanese Central Bank will continue to "print money" (properly) caused the market to press the big red button.
What's the bottom line when you see organizations spin their wheels like this? Simple -- the Japanese Central bank, just like The Fed, are rapidly losing confidence of the market.
Heh that's impressive. NOT!
There's a target at $1136 -- which had better hold.
If it doesn't look at the dashed line because that's probably where price is going.
For those who had gold fever in their eyes and were picking out the interior options on their yacht for the day that Gold went to $5,000/oz -- you may wish to downsize your intended purchase to a used Yugo, especially if you were out there on margin.
Incidentally a couple of months ago when silver was in the upper $20s I called the break under the shelf with a target under $20 in the videos available on the forum to donors. We're in the target zone now. If it doesn't hold the next target downward has one digit in front of the decimal rather than two.
A bit of shameless self-promotion.....
This is why I put up videos on the market a few times a week, and is an excellent example of the opportunities that can present themselves within the market!
Your mileage may vary of course, but if you'd like access you can find details on enhanced Tickerforum access at http://tickerforum.org/faq.html#donate for those who support the forum!
PS: Apple looks like it may be headed for $455..... or lower.
So you want to "BTFD" on Silver eh?
You might want to look at this first....
That could be a problem.
Price, as it stands right now, is at a volumetic null. This is a logical place to get involved but if you do it I would be extremely careful under $45 - there's a real possibility that the only real support in that chart is down near $31!
Buyers, especially new buyers of which all of those people are, can very quickly turn into sellers.
Should the $45 level hold then all is good.
But..... don't chase price downward if that level fails. The risk of getting severely damaged on a break under $45 is very real.
Disclosure: No current position - but that's likely to change if the $45 level goes down.
I know, I know, the market only goes one way.
So believe many people.
Those numbers have never been seen before in my recollection - and as far as I can tell (by looking back at the stats), never by anyone else either. In fact that opening print is more than double the previous all-time high.
These are retail CALL buyers folks - not institutions.
Then there's the CBOE $CPCE index (same deal but including institutional buyers) which reached an 0.32 level yesterday - a record going back to at least 1997.
Again, these are monstrous contrary indicators - they show that "retail" is not only fully involved in betting on "higher prices" in the stock market but is positively giddy and bubbly about the stock market.
Is this a guarantee that things are about to get bad? There are no guarantees.
But that, coupled with the VIX SELL signal that we got two days ago (a rare indicator that I covered in my nightly technical video) if you're not being cautious here you're asking for it.
Here are the two most-recent VIX SELL indicators (that is, go long volatility, and short the market):
The January signal was followed by a ~8% selloff.
And here are the three previous indications of the same signal:
May '08 Options expiration was a local top that led to a nasty decline. So was the end of February of 2008, and so was the end of the year in 2007.
There was one failure in the last several years - on 10/13/06 we got a signal but that did not lead to a material decline.
But on 10/13/06 we did not have the sort of giddiness in the other sentiment indicators - this time we do and at present those indicators are at levels that exceed what we saw during the parabolic blow-off in 1999 and 2000.
This latest "recovery" from the January sell-off has every characteristic of a parabolic blow-off. These can go further than you would ever imagine, but be warned - with sentiment where it is now, along with the utter lack of anything approaching fundamental support for these valuations, it will take only one little "triggering" event, much as it did in March 2000, for the run to the exits to occur.
Oh, and lest you think the "Wise Guys" don't see it, have a look at the /ZN today, which has gone vertical the last few hours. That's big boys selling into this strength and buying the Treasury curve.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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