| |
Abe's Blog
The Worst Day of the Year = Great Forex Trading
By Abe Cofnas
June 6, 2008
www.learn4x.com
Look at the chart below. It shows today’s movements of the SPX and the Dollar/Yen pair ( USDJPY). You can hardly tell the difference! It is a synchronicity that can be set to music. This relationship is more than technical- it is fundamental as well. When the equity markets are down, the risk appetite of investors decline. Where does the money go? A lot of it goes to buy back Yen which has been borrowed at 0.05% and then invested in securities and assets such as the SPX. When the market is perceived to go up, more borrowing occurs. So should not be surprising that there is a linkage between Yen strengthening and US equity market weakness.
Look at this chart below, put it up on your wall. It will make you money. Generally, if the SPX or Dow is in momentum move down- look to Sell USDJPY in the currency spot market ( or buy yen in the futures market). If the SPX or Dow is surging up- Go and buy USDJPY( or sell Yen).
A secret of success in trading is to identify high probability opportunities. This SPX and JPY relationship is among the best high probability opportunities around.
|
Previous Blogs:
June 6, 2008 - The Worst Day of the Year = Great Forex Trading
May 29, 2008 - GET READY TO SELL THE KIWI
More Blogs
|
|
