Currency Market - Japanese Yen Highlight #1

7 year low in the Japanese Yen occurs 1 day after monthly/weekly "Inversion Cycle" ALIGNMENT and cash/futures DIVERGENCE buy signal.

(COMMENT #s  8, 15, 23, 35)

UPDATED 19980105

COMMENT 1998-8

Note the middle chart on page 281 of "The 1998 $upertrader's Almanac - 1st Half Edition".

Odds favor approaching this position from the long side.

1. Can you see the vertical line on the right of the chart? This line is a monthly "Inversion Cycle".

2. Note, on page 241 of "The $upertrader's Book of Linear Time Cycles" that both the monthly and weekly "Inversion Cycles" are aligning.

3. The monthly "Inversion Cycle" is shown graphically by the dotted line on page 331 of "The $upertrader's Book of Linear Time Cycles". Note how the largest "Inversion Cycle" monthly projection of the year occurred right at the major peak in November. Though of lesser magnitude, the January projected turn is still important.

4. The weekly "Inversion Cycle" is shown graphically by the dotted line on page 333 of "The $upertrader's Book of Linear Time Cycles".

5. The cash market bottomed way back in early August almost exactly at the projected "Linear Time Cycle Index" low (see the solid line on page 333 of "The $upertrader's Book of Linear Time Cycles").

6. Today's low is an almost-perfect ratio TIME RETRACEMENT (i.e., the TIME traversed from the August low to the November high is a 1.737 (SQ RT 3 = 1.732) multiple of the TIME traversed from the November high to today's low.

7. The decline in price from the November high to today's low is .706 (1/SQ RT 2 = .707) and is an almost-perfect PRICE RETRACEMENT of the advance from the August low to the November high.

8. In the March futures, the decline is just a tad below the .786 retracement level (1/SQ RT PHI).

9. Traders should be particularly sensitive to market reversals to the upside in this market and should employ approaches that provide long entry with tight stops against recent highs in the March contract. As an alternative, position long against the August lows.

10. The very short term trading system presented on pages 96-101 of "The $upertrader's Almanac - Reference Manual" is such a "system" and can be used on either daily or intra-day charts.

11. A close above the open over the next few days will cause a "black" candlestick which should be sufficient to provide a short term entry signal.

12. The system presented in pages 205-209 of "The $upertrader's Almanac - Reference Manual" is particularly suitable for this market at this time as is the "ALMANAC II" trading system presented in "The 1996 $upertrader's Almanac - 2nd Half Edition). Note that the same pattern applies to the hourly chart which reduces risk and provides for tighter stops.

13. The reader should observe that trading is simply the process of identifying a number of situations such as this one that have a chance of working out quite well if the analysis is correct but which involve very little risk to capital if wrong.

UPDATED 19980108

COMMENT 1998-15

Turn to page 337 of "The $upertrader's Book of Linear Time Cycles".

1. Because of the upcoming meeting, the OPTIONAL FAX of The Seasonal Trade Portfolio has entered this market this morning from the long side on a break of the lower edge of the two day island gap following this morning's gap down opening.

2. Note, in the "Cyclic Trends" portion of this page, that the cycles are in an "up phase".

3. Note, in the bottom chart, that this "up phase" is shown by the solid line of the "Linear Cycle Index" which trends up into the spring.

UPDATED 19980115

COMMENT 1998-23

COMMENT 1998-15 reviewed the Japanese Yen market amid a Tsunami of negative media comments.

1. The Yen broke the major down trendline of the last two months yesterday.

2. The entry price reviewed in COMMENT 1998-15 was 7587.

3. The close above the down trendline is a positive development.

4. The close above 7728 today is also above the 9 day island gap.

5. The move has now covered almost 200 points.

6. See pages 335 and 337 of "The 1997 $upertrader's Book of Linear Time Cycles" for more.

7. Suppose more than a few have paid for their "Almanac" and "Cycles" books for the next several years with this one!

UPDATED 19980120

COMMENT 1998-35

1. Traders should apply the "ALMANAC V" trading system to enter long positions in the market reviewed in COMMENT # 8.

2. Note on pages 45 and 333 of "The 1997 $upertrader's Book of Linear Time Cycles" that the second of two "Inversion Cycle Indexes" this month occurs this week.

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