EWV is a leveraged inverse ETF on Japan. Because the events in Japan could in no way be discounted by smart money, it's not likely they had any meaningful position in the ETF when the quake hit. EWV did respond with a major knee jerk reaction move up, but just as we saw with oil when events in MENA started to unfold, institutional money will eventually bring EWV back down so they can accumulate a position. It's clear there's a lot of confusion about what is happening in Japan and given the culture, it's not surprising to see the rift between US nuclear experts and those in Japan. Obviously I think US experts are less biased as the Japanese government has to deal with panic and try to calm the country as much as possible. Thus we have seen many contradictory statements arising from different Japanese agencies and the US having a much more dire take on events.
In any case, EWV has pulled back, accumulation appears to be present and I believe that smart money has taken up a position and is close to letting it rise once again.
Here are the charts. I do think this is a trade worth your serious consideration, even if only for a swing trade.
EWV goes ballistic on events in Japan and since has pulled back, much like oil did while the controversy in Egypt raged-at the time, it made no sense considering the implication for oil with a Suez closure. However, smart money isn't going to let a position take off and make tons of money without them having a piece of it.
The crossover screen has all 3 signals for a long, but more importantly, it has pulled back to the typical area for a first pullback after a big move, near the yellow 10-day average.
Here the 5 min chart shows positive divergences
As does the 10 min.
I saved the 1 minute for last as I believe it is showing the market maker, specialists and HFTs now taking on stock for a move up. This divergence is occurring into a relatively lateral trend which is where we typically see them as they try to establish a low and stable cost basis.
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