U.S. Dollar/Yen breaks 18-year resistance line, good for Nikkei 225?

dollaryen18yearbreakoutattemptmay26CLICK ON CHART TO ENLARGE

The chart above takes a look at the U.S. Dollar/Yen ratio over the past few decades. Monthly resistance line (1) has been in play for the past 18-years. As the month of May is nearly over with, the US$/Yen is making an attempt to break above this long-term resistance line.

It is frequently expressed that Yen weakness, can be a positive for the Nikkei 225 index. Below looks at the Nikkei Monthly, over the past 30-years.

nikkeimonthlybreakingabove38fiblevelmay26CLICK ON CHART TO ENLARGE

This chart reflects that the Nikkei is working on a break above its 38% Fibonacci resistance level, that is tied to its highs in 1989 and the lows during the financial crisis back in 2009.

The Nikkei over the past 6-months is one of the better performing stock markets in the world.

A breakout in the US$/Yen and the Nikkei increase the odds that the current trends in play, continue.




King Dollar & Crude Oil reversing ST trends, says Joe Friday

joefridaycrudeusdollarbreakinglinesmay22CLICK ON CHART TO ENLARGE

King Dollar and Crude Oil have been have had little correlation over the past year, as each has traded in pretty much opposite directions.

Over the past 9 months King Dollar has had a historical rally and the opposite is true for Crude Oil.

Of late Crude hit its 23% Fibonacci resistance line, based upon last summers weekly closing highs and weekly closing low on 3/13/15.

Joe Friday just the facts….Crude oil is making an attempt to break short-term steep rising support this week and King Dollar is attempting to break short-term steep falling resistance.

Crude oil just experienced its 7th largest 2-month rally in its history (See post here) reflected in the chart below.

crudeoil2monthrollingperiodsmay20CLICK ON CHART TO ENLARGE

Could it be a time for Crude Oil to cool off a little???


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Red Hot Shanghai pushed above another resistance level


When it comes to Red Hot stock markets the Shanghai index fits the bill. Below looks at the Year-To-Date performance of the Shanghai, DAX and S&P 500 indices.

performanceshanghaidaxspyytdmay21CLICK ON CHART TO ENLARGE

As you can see the S&P 500 is lagging big time this year and even though the DAX is having a great year, the Shanghai is up twice as much.

What would stop this Shanghai? Could it be a key Fibonacci level? The chart below looks at the Fibonacci 61% level, based upon its 2007 weekly highs and the financial crisis lows in 2008.

shanghaiindexpushesabovefib61may21CLICK ON CHART TO ENLARGE

The Shanghai index this week looks to be pushing above this potential resistance level, after testing this Fib level as support.

At this time the index is about 30% below its all-time highs. Will enough investors pile into this index so it makes a run at these highs?

The run in this index from 2005 to 2007 was incredible, as it went up 4 fold in just two years. Once support broke investors flocked to the exists. The current rising channel is near as steep this time. Steep rising support was critical then and I humbly feel it will be again.

Full Disclosure…Premium Members own the pair trade, Long Shanghai (FXI) and Short the S&P 500 since the end of March