The action in equities is ugly this afternoon, as bulls did not want to see distribution day after last Thursday’s upside reversal.
I view the Japanese Yen as the wild card, or “X-factor” here, given the inverse relationship between stocks and the Yen. We looked at the Yen in recent weeks as being a snapback rally candidate.
And that is exactly what we are seeing here, coinciding with weakness in equities.
Should the Yen rally up to its ETF’s 50-day moving average, a real possibility, I expect equites to come under more pressure.
I am positioned for just that.
Into the final hour, I took profits for big wins in LAKE and JO.
See you for the recap.
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During World War II, 3,860 kamikaze pilots were killed, about 19% of kamikaze attacks managed to hit a ship.
I’m having a tough time squaring the oil weakness, along with the weakness in the gold miners (but not gold itself) with the bounce in the yen and the pullback in the US dollar index.
Some food for thought …
http://tos.mx/uAXFHS
http://tos.mx/uyxGeP
Chess -Teriyaki Trappin’? http://www.youtube.com/watch?v=X5J-op-vWU4
(apologies) 😉
Sold LAKE to on that crazy spike toward 10.70. Held JO.
You’d need way more strength in Yen to get scared of carry trade unravel. FXY has gone down a lot as of late.
Looking for it.
well played!
Thank you, sir.
Chess ~ your analysis of market conditions – and now it’s clear you were ahead of the pack – has saved me much $$. At the same time, I appreciate how you and Ragin Cajun find trades that work despite the challenging tape. I’m learned a lot from everybody in the Pelican Room. THANK YOU.
* learning
Thank you very much, kelly. Great to have you in 12631.