Sunday, April 10, 2016

The Yen Breaks Out,
Implications For Stock Markets
Acting Man analysis & charts on the implications of the recent strengthening in the Japanese currency on the stock markets .. "Will this turn out to be meaningful? This is of course not certain yet – but we note that while market internals generally remain strong for the moment, Nasdaq Composite and NDX also continue to lag the recent advance. Add to this the yen’s show of strength, and we have at the very least good reason to treat this as a 'heads-up' type of signal. Note also that the S&P 500 Index is just above its still declining 200 day moving average, in a position quite similar to that of the November – December period. Perhaps there will be a similar period of back-and-forth trading until the 50 day moving average catches up with the 200 day m.a., as it has done in December – timing-wise, this could well happen close to the next FOMC meeting later in April."
LINK HERE to the analysis
LINK HERE to our recent related post

From Our Archives:
March 25, 2016

The BIG Financial Development Of 2016?
The U.S.$ Was Shanghaied?
Jim Rickards* sees indications that the U.S.$ has been shanghaied by the G20 meeting in February, attended by central planners & currency manipulators Janet Yellen from the Fed, Christine Lagarde from the IMF, Mario Draghi from the ECB & U.S. Secretary of the Treasury Jack Lew along with their central bank & finance ministry counterparts from Japan, China & the other BRICS .. "The outcome of this secret side meeting was the biggest dollar take-down operation since the famous Plaza Accord of 1985." .. by agreeing to make the Japanese Yen & Europe's euro stronger, the Chinese Renminbi was made weaker but without the shock of a Chinese devaluation against the U.S.$ .. Rickards sees the results in the financial markets - U.S. stocks going higher, Japanese stocks getting crushed & gold soaring .. "What’s next? There’s another secret G-20 meeting on April 16, 2016. This will take place on the sidelines of the IMF spring meeting in Washington, D.C. I’ll be in Washington then reporting from the front lines. At the April conclave, I expect the Big Four (Japan, U.S., the eurozone and China) to leave exchange rates alone for the time being. They’ll want time to evaluate their work following the Shanghai Accord before taking next steps. The Big Four may later want to run the Shanghai playbook again just to give China more breathing room. The Shanghai Accord seems like a success for the central banks. This means the Big Four will want to try it again to ease financial conditions in the U.S. and China. They won’t push it too far, because Japan and Europe are fragile. We’ll wait to see the indications and warnings before the April meeting. For now, a stronger yen and stronger euro are both in the cards. The Shanghai Accord happened in stealth, but it will go down in history as a major turning point in the international monetary system."
LINK HERE to the essay

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