Using the Yen as our thermometer for risk

Wealthy Bucket

Wealthy Bucket

The stock market began the year with a very negative tone and showed some signs of optimism only to leave investors with questions regarding stability to start the week. Since the week is relatively light in terms of headline news (U.S. Retail Sales will be the main driver this week), we will be using the Yen as our thermometer for risk. Should the Yen continue upward towards immediate resistance, then, we are expecting more chop and a further reduction in the overall indexes.
 
The Yen? Their economy has been in the doldrums for 20 years. Everybody is waiting on Draghi and Merkel to come up with a plan. The US can't carry the world on it's shoulders. So, we need Europe to get out of bed.
 
xandman said:
The Yen? Their economy has been in the doldrums for 20 years. Everybody is waiting on Draghi and Merkel to come up with a plan. The US can't carry the world on it's shoulders. So, we need Europe to get out of bed.
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We use the yen as an indicator of where money is flowing. If you understand the correlations between futures currencies and commodities you can time your investments with higher probability. We focus on hard macro economic data never news.
 
Wealthy Bucket said:
We use the yen as an indicator of where money is flowing. If you understand the correlations between futures currencies and commodities you can time your investments with higher probability. We focus on hard macro economic data never news.
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who is this "we" Kemosobe?
 
Correlations are in a constant state of flux. There is no way for you to predict much from the Yen except the dollar and Nikkei. The BOJ has all but promised that the Yen will sink so that should result in Nikkei moving higher and of course the Yen makes up a significant portion of the DX contract to they move inverse.
 
The gnomes in Tokyo have been printing money and buying/building debt for years. Japan's economy now is very hard to gauge: the whole thing could go south quickly. I expect 130 on USDJPY this year
 
Sometimes Yen is pro risk-adversion, sometimes not !
In the second case, you know where you can put your thermometer ! :confused:
But I agree, on a short-term basis, Yen could be a big winner and aversion could make a come back. Volatility is already back!

See graph. Seems that we break symmetrical triangle. To be confirmed with a lower low @117.
Strong support @110

Chris Mac

yen.gif
 
"As there is a lack of headline risk from Japan this week, we will look for the relationship between Yen and equities to normalize. We will anticipate selling pressure in equities as Yen climbs towards immediate resistance." - Bucket Weekly January 12th 2015. This chart was captured and expectation written on this past sunday. If you look at what is happening on a daily chart since then our analysis has been and will be spot on.
yen-daily1.png
 
clacy said:
Correlations are in a constant state of flux. There is no way for you to predict much from the Yen except the dollar and Nikkei. The BOJ has all but promised that the Yen will sink so that should result in Nikkei moving higher and of course the Yen makes up a significant portion of the DX contract to they move inverse.
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Im not sure why you cannot predict much from the Yen. The question now is if you know what the dollar and nikkei are doing then what can you expect U.S equities to do?
 
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