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Are we looking at the next 20-30% drop in the stock market? First of all, this is not to cause alarm but to look at the JPY chart from a holistic long term view. The last time we posted about a market drop, it came true. This chart is a summary of how we called the DJIA to fall from 35,200 to 29,000. This was also followed up with a posting on the SPX from 4200 to 3700. Looking at the long term view of all the YEN pair, we are seeing massive reversal signs on weekly chart. When YEN strengthens, the stock market falls as risk off sentiment comes back. This will be analyzed looking at the AUDJPY. The pair just completed a Head and Shoulders and it is poised delicately. If it can go above 97 and close strong, we will see the markets go up and the pattern is over. However what is more likely to happen is that the AUDJPY will start dropping down due to the shoulders at 95.80 and head at 97. The first level is 90.32 and then to 87.20. The drop in the AUDJPY is going to be corresponding to the drop in the indexes. How long will this take? I believe it will be a slow grind down. This level is likely to be reached in about October to December timeframe. Would love to hear your thoughts and comments. Cheers
Education
by JD_TeenTrader
Time for the USD to take a breather - Selling USDCHF nowThis is a counter trend trade, so it is best to monitor it closely. If there is a break and close above 0.9700, I will close at least half the trade. The USD has been spectular but every currency ebbs and flows. There is a chance for us to buy USDCHF but it also means we can sell it to get there. USDCHF has made a high of 0.9700 yesterday and it is showing weakness in H1, M30 and M15. There is also a massive D1 pattern here. We are entering a quick sell position with the hope of buying it at 0.9640 again.
Short
by JD_TeenTrader