Your Road Map For This Yen Rally

From the desk of Thomas Bruni @BruniCharting

***

With the Yen rallying nearly 10% from intraday low to high in as many days, this breakout is not one to be ignored. Since the Yen has  a strong negative correlation with US equities, this inter-market relationship is an important one to keep track of regardless of whether you trade currencies or not.

Structurally the Yen has been trading in a seven point range at and below the 2006-2007 lows for the last 15 months. Late last year prices confirmed a failed breakdown by breaking back above the 2005 & 2007 lows, as well as the downtrend line from the 2012 highs.

Over the past two weeks prices have accelerated to the upside, providing additional confirmation that this market is headed higher. As long as prices can hold above support outlined in gray (.0082), then the weight of evidence suggests the first upside target is near the 161.8% extension of the late 2014-2016 range and prior support near .0098-.0099.

Desktop Chart Continue reading

Advertisements

U.S. Stocks Are Ready To Play Catch-Up

From the desk of Thomas Bruni @BruniCharting

***

A few weeks ago global equity markets began to mean revert to the upside after many met downside targets and momentum positively diverged. For examples of this check out my posts from then here and here. The same failed breakdowns and bullish momentum divergences that sparked a rally globally are now present across many of the US sectors and indices.

Of the 41 US indices / sectors I follow, 28 of them have bullish momentum divergences on the daily charts and have either confirmed, or are working on confirming, a failed breakdown by trading back above a prior low.

A chart of the S&P 500 cash index is a good example of the conditions I’m referring to. Last week prices made new marginal lows and quickly reversed while momentum put in a higher low. If prices can close above the August lows, it would confirm the failed breakdown and bullish momentum divergence. Structurally this remains a bear market, but with prices 9% below the 200 day moving average the weight of evidence suggests that a counter-trend rally could develop from here.

Desktop Chart

Continue reading

Why I Want To Buy Disney Above 90.50

From the desk of Thomas Bruni @BruniCharting

***

Regardless of how strong their brand may be, Disney continues to remain correlated to the S&P 500, as most stocks do during a bear market, and remains in a downtrend. Despite the neutral to bearish structural picture, the stock looks to be setting up for a tactical bounce in the coming weeks.

Structurally the stock remains range bound between 90 and the all-time highs at 122. During this recent selloff, prices retested the uptrend line from the 2009 lows, which also corresponded with the 38.2% retracement of the 2011-2015 rally. I don’t believe in triple bottoms, and although this is the third time testing the $90 level, current evidence suggests the stock can stage a counter-trend rally before continuing to the downside.

Desktop Chart Continue reading

Is It Time To Buy South Africa For A Trade?

From the desk of Tom Bruni @brunicharting

***

South Africa ETF To Rally 25%?

With global equity markets looking poised for a tactical bounce in the week(s) ahead, one market in particular looks ripe for a potential squeeze higher.

South Africa has been in a strong downtrend since breaking down from a symmetrical triangle late last August. Selling quickly accelerated after a major support level near 51-52 broke shortly after the breakdown from, and retest of, the symmetrical triangle. Last week prices traded through another major support level near 40 and swiftly reversed to close the week back above it while momentum diverged positively.

Although the main structural downside target lies near 32, current conditions suggest a counter-trend rally may be in the cards. As long as this failed breakdown holds, prices look like they could retest the broken support level near 51, which also corresponds with the 38.2% retracement of the 2015-2016 decline and the downtrend line from the 2015 highs.

eza bruni 1

Continue reading