Here is a weekly chart of the Japanese Yen, a market setup nicely for a move. We have been in a great uptrend here for awhile, might things be changing? Notice on the last leg up the commercial selling that took place, which happens to take us to the same level of selling that we had there during the last price peak ( Blue horizontal line ). Also, my proprietary Small Fries sentiment recently hit a very high reading, as did the LW sentiment indicator. This is also happening right at a time when we have typically had the seasonal high for this market.
All of this tells us that this market is setup for a decline, will it? I do not trade off weekly charts, I use them to find markets that are setup. Sometimes this bites me because I miss smaller moves only apparent on daily charts. That is ok by me because as I state so often here, this is a difficult business. I want to have as many things in my favor as I can have before entering a trade. The recent Silver move is a perfect example of how powerful trades are where multiple time frames line up together.
Here is a daily chart which also has a setup for an entry.
Once again we have the Large Proxy Index indicating the Large Traders have become sellers in this market. We can tell that from just looking at the chart with that sharp break that occurred. The two momentum oscillators are also both under their trend lines, and we have had a bounce. The red arrow above the recent high is a proprietary indicator of Larry Williams that often does a good job of finding short term peaks and troughs. A breakdown out of this bounce is a definite shorting opportunity.
This market has been an interesting market this year. Early on it was the flight to quality vehicle when our US markets crashed. However as our marked stayed strong, this market also regained it's strength. It appears now that we are setting up a flight to quality in the Dollar now and the Yen will decline. I think we are on the verge of a signifcant decline in US Equities as I have stated here repeatedly. I think the powers that be are going to keep it propped up through years end. However, Barry and Co. and what they are doing with spending is going to matter sooner vs later. If you combine that with what I think is a coming Commercial Real Estate crash, I think we have alot of things lining up for an interesting first quarter of 2010. We have built another bubble here, which is one thing we seem to be able to do very consistently.