USD/JPY Lever About to Give Way

I mentioned earlier that the $USDX looks weak and thus if it starts to fall as the intraday 3C charts suggest, the USD/JPY falls, which is one of the 4 main levers used to ramp the market higher after our December 12th forecast of an IWM move above its 6 week range.

This is just one of 4 levers that look bad right now, but with the USD/JPY as with the others, it's not just the short term intraday that I'm looking at,, but the larger Yen positive divegrence and larger $USD negative divegrence, both which were part of ramping the market according to our forecast as you'll see on the longer term $USDX chart, thus this would have significant effects on the market to the downside.

First the intraday USD/JPY chart which has seen a deeper 3C negative divergence as we hit the cash market close.

 USD/JPY intraday 1 min chart since just before the European open to present, note the deeper leading negative 3C divegrence as the day wore on.

 This is the $USDX 1 min negative chart I have mentioned several times today, if this deep 3C divegrence pulls $USDX lower, USD/JPY and the Index futures will follow.

However the bigger picture is really about this forecast of the move above the IWM range as a head fake move that will not hold, the move itself being a means to an end, not an end as the rest of the forecast is for the move above to be confirmed as a head fake move (false breakout) which we have so far, leading to the same kind of downside momentum that the move below the range on the 15th and 16th led to in upside momentum until they triggered a short squeeze, with levers like USD/JPY, HYG, TLT, and VXX being used for the initial spark until price moved enough for the Most Shorted name squeeze to kick in.

 This is the $USDX 30 min chart, a much stronger and more meaningful chart, but look where the positive divegrence started to the left, the same time we saw the first head fake below the range in a Crazy Ivan shakeout (shakes out both sides of the range). This is the exact two days that the market gave us positive divergences and confirmed with charts, what we suspected the Friday before based on our concepts and Mass Psychology.

Along the same lines, the negative divergences expected in the market averages/Index futures which are there, are also present in the $USDX, this is no coincidence.

At the same time, the other half of the pair, the Yen would need to show some upside strength which would also send USD/JPY lower.

The 60 min 3C chart of the Yen has a significant positive divegrence in an area of a rounding bottom.

Again, I don't think this is any coincidence, but rather the means to the end, setting up for the fulfillment of our forecast from 12/12.