If there is a 6 point drop in USDJPYand a sharp reversal in USDJPY then the stock market has put in a meaningful bottom with support at the low of the USDJPY. Once you see a bottom in the USDJPY, mark a bottom in the SPX500 and carry it over 3-6 months because that is how long the support level is good for. See for yourself.
Look at the Election low, for example.
The SPX500 went right back to the middle of 3 of support levels when it was "locked limit down" overnight after the election results = right at support. And held like a rock.
These USDJPY Bottoms are "KEY HIDDEN LEVELS" in the market that provide reference points for future drops in the market to test support.
See for yourself.
And join us in the Key Hidden Levels Chatroom here at Tradingview.com
Tim
10/5/2017 9:10PM EST
Bình luận
⋅
Another 6 point selloff in USDJPY and the equivalent level in SPY
Excellent, they align with VIX as well, but not quite the same.
timwest
⋅
@IvanLabrie, I think we could combine the two signals together and get even more powerful signals.
A-shot
⋅
Intersting observation! Question - how come you checked this pair? Anything that can be the cause?
timwest
⋅
@2use, I imagine that money can be made available to invest in US stocks by selling the Yen. If that reasoning holds, then it could be charted with this pattern where "funds created from selling Yen then flows into other assets" and when the Yen rises look to see which assets are going down to get the idea that people are unwinding their positions. If we had daily margin tallies from all brokerage firms, we could see what price moves were happening alongside of what all asset markets are doing to figure out where the money 'may have gone'. I think we all try to figure out what is going on by watching what moves together and what moves opposite. What I have found is a way to graph those realities in a way that is unique to the common process to use "correlation analysis". I think we are all more complex than a "straight correlation" because market participants don't give away their positions that easily. As in a game of poker, you don't look for the "tell" until there is a moment of stress where the player isn't able to stop the natural response. Outside of that, the player can mimic and act to hide their true position. So, what I like to look for in the markets is a similar pattern - find times of stress (6 point drops in the USDJPY) to see what that triggers. I could do the same analysis on the other currencies and see what shows up.
A-shot
⋅
@timwest, JPY Is strongly correlated to USD, on par with EUR and GBP - but then again indeed what if other currencies have a similar correlation? Also, money flow - flow between the markets is different than cross-markets? People investing in stocks wont necessarily trade Currency pairs?
timwest
⋅
@2use, Hi and apologies for not responding to this question from a year ago! I get so many emails from Tradingview that many questions get buried for me in my inbox. Either way - I don't have an answer to your question. I can say that I was on an institutional trading desk in the 1990's and found a pattern where the USD would fall more than 5% and I would notice nothing but sell orders come into the US equity market from our overseas branches in Europe and Japan. It was consistent to my observation. If the stock market went down AND the DXY fell, then non-US investors were seeing a big loss on their investments. They would look to limit the losses and dump enough positions to get down to a comfortable level again. I no longer get this raw data to see what fund flows are with any degree of accuracy. I think you could ask around to find what currency is being used to fund financing for other markets. I'm currently out of the loop. Cheers, Tim 9/29/2018 1:47PM EST