USDJPY, Thursday Apr 11, 2013

Hi Traders,

The Japanese Yen is heading to the area 101.3/101.65 and beyond, as I indicated so many times in my posts since January 2012.

A BIT OF HISTORY

Not many traders know that the USDJPY rate was fixed at ¥360 in 1949. Since then it climbed relentlessly to ¥75 in Feb 2012.

It showed some weakness only in case of OIL Shock (and subsequent Trade Deficit) and when the Asset Price Bubble burst, as it occurred in February 2002, when it reached the low at ¥134.8.

That is to say that that low at ¥134.8 could be once again a possible target.
 
Other Fib Nodes: ¥105.39, 112.12, 118.4, 123.2, 128.7, 134.8
 
SITUATION
 
Although there's no sign of trend reversal or weakness yet, the ¥ could take a break after reaching ¥101.3/65 or higher and start a large ABC retracement within the weekly chart.
 
SET UP
 
The Elliott Waves in the 4 hour chart show the completion of 3 waves up (out of 5). The subsequent wave 4 should retrace a bit downwards (maybe to ¥98.6). Then Wave 5 should get the currency to ¥101.3/65.
 
ENTRY POINT
 
If this happens, wave 4 should unfold with an ABC or even an ABCDE down, in the 1 hour chart. This low could be a good entry point. 

Assuming that you want to take advantage of the last rally to 101.3/65 or higher, this Entry Point for your long position should be identified through your 15 min and 5 min charts.

The low will show up at the  end of an ABC or ABCDE and should be confirmed by a strong reversal candlestick accompanied by the sign of a trend reversal in the Wave Oscillator (similar to Bollinger Bands).

If you don't know how to use the very new Wave Oscillator feel free to ask.
 
Below the charts

 

Monthly chart: click to enlarge

 

 

 

 

Weekly chart: click to enlarge

 

 

 

 

Daily chart: click to enlarge

 

 

 

 

4-hour chart: click to enlarge

 

 

 

 

 1-hour chart: click to enlarge 

 

Major Indices, Wednesday April 10, 2013

Hi Traders,

Before starting:

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SETUP:

This is a comparison between 6 Stock Indices by using their Daily Charts.

SITUATION:

There's usually some correlation between indices but this time this relationship seem to be broken.

Although each chart shows that we're completing MAJOR wave 5 (upward) it's interesting to notice that:

• The European Indices (CAC40, DAX30 and FT100) seem to have completed 4 MINOR waves up (our of 5) and they're starting the last one up.
• The US Index DJ30 seems have completed only 3 minor waves up it might start minor wave 4 (down).
• The US Index S&P500 seem have completed 4 minor waves up and it's almost done with minor wave 5 up as well
• The Australian SPI200 seems to have completed all minor and major 5 waves up already. It has also completed retracement wave A (downward) and it's staging the new retracement wave B upward.

 CONCLUSION:

 If we take this thesis for good:

• In Europe the indices might try to make a double top or a new top
• The S&P500 is almost at the top
• The SPI 200 is doing a sort of double top or lower
• DJ30 might actually touch/broke the upper line of the channel and then retreat considerably

 TRADING:

The dividend season is approaching in Australia and I wouldn't enter the market now. After completing wave B (upward) the Index SPI200 might stage a considerable dip. that could actually be a good short.

The S&P500  might be close to the very top.

DJ30 seems to have stage an overextended minor wave 3 and could stage a retracement (minor wave 4).

As the trading risk is getting too high  it might not be worth it till we see more clarity.

This time I'll give it a miss till I see some good signs of reversal.

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