Back to the Currency Connection

The Currencies are a big part of what I believe to be driving this market, especially the Yen and the $USD so lets look at the action in the Yen as to what it tells us about the market in the near term, you already saw my post from this weekend about the bigger picture which is not only closer and closer, but I believe we are already in it, it's just the market is never going to make it easy and is not going to give you a clean, clear straight down reversal without plenty of head fakes along the way, so we need to look at all the clues.

 The 30 min Yen is one of several longer term charts that show very high probabilities of the Yen strengthening further to the upside which is market negative, but even here on this leading positive 30 min chart, we have a small negative divergence suggesting a downside pullback which is market positive (along the lines of that stage 2 market dead cat bounce-or whatever strength bounce it is -not a primary trend reversal in my view).

 The 15 min chart has more detail and shows a sharper negative divergence in the Yen and a Yen pullback is market supportive so this actually is confirming the Futures and market averages' charts.

 This is one of the stranger divergences I have seen in the market and the futures as the mid terms have seen strength and it seems to be up to the short terms to bring that strength to the point of reversal. Here the 5 min chart has a hint of a negative divergence so it needs to (like the market averages) show a more positive divergence and then we know we are closer to the actual price reversal although we can already see it in price momentum as the upside momentum has faded.

The 1 min chart looks choppy, like lateral trade, so that would be similar to a "U" or "W" reversal base in the market averages being the Yen is essentially the mirror opposite of the market.

Wherever we can find the most clues and put them together is where we have to look. That's why there's the saying, "To make money, you have to see what the crowd missed".