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[TechMan]

The Yen, that is. And, that's a whole lota liquidity being pumped into the system.



And, now it's coming to a critical "make or break" level.



While it's unknown whether the Yen has got enough left in it to break out, the Nikkei had already had its "breakout party".



So, TechMan, what's all that got to do with anything?

The Yen and therefore the Nikkei historically have had a positive correlation with the U.S. market. While the Nikkei has already broken out, the Yen has not. And, that is a non-confirmation. It either gets confirmed or reversed.



More importantly, for a day trader like me anyway, so many things are lining up, in historical and contemporary proportions, for an imminent big move rather than the continuation of low volatility grind.

Incidentally, it'll be interesting to see how Shanghai and Shenzhen, and subsequently the rest of the world, respond to the PBOC announcement tonight.

Early trading indicates "risk-on" as Chinese central bank (PBOC) announced an earlier than expected easing by cutting bank reserve ratio by 50 bp.

This post has been edited by TechMan: Feb 19 2012, 05:11 PM

[TechMan]

Incidentally, it'll be interesting to see how Shanghai and Shenzhen, and subsequently the rest of the world, respond to the PBOC announcement tonight.

Early trading indicates "risk-on" as Chinese central bank (PBOC) announced an earlier than expected easing by cutting bank reserve ratio by 50 bp.

Looks like quite a jump in futures following Chinese central bank easing. But it also looks running out of steam for now, starting with most notably, the above referenced Yen.

Aussie's up 50 points, and Tokyo's up 150 points. Next, China.

[TechMan]

The above commented China central bank's 50 bp RRR cut reportedly many add 400 billion yuan to the financial system.

Meanwhile FXCM US Dollar Index is fighting to stay above 9,790. Failing that could expose the Dollar Index to 9774 and lower. And, the Yen, as noted previously, has been gaining on the Dollar. The USD/JPY pair had dipped below 79.53 level (same as on the charts posted above) and wiped out all the gains since the open.

As an aside, the names, iPhone and iPad, may be put on shoes and even diapers in China, as 39 Chinese companies and individuals have attempted to register the two trademarks in categories that Apple has not.

Looks like pop and drop in China. Shenzhen & Shanghai both opened up well above 1% but couldn't hang on. Well, the night's still young. We'll see.






This post has been edited by TechMan: Feb 19 2012, 08:38 PM

[Dex]

Looks like pop and drop in China. Shenzhen & Shanghai both opened up well above 1% but couldn't hang on. Well, the night's still young. We'll see.

Looks the same for Tokyo, HK & Austraila - drifting lower - euro not doing much.

[TechMan]

U.S. futures opened up 8 points due to China easing is not a "huge" gap. Anyway, it's been trading in a very narrow range since the "not-so-huge" opening gap. The key to me is that above referenced 9,790 Dollar Index support level, and it seems to be holding up well so far. And, as long as it holds up, this may be as good as it gets.

Meanwhile, Japan's January trade deficit set a new record, due to rising fuel imports. It's overall exports dropped 9.3%.

[EDIT]
And, as the Yen starts to rally back up, the Nikkei starts to decline in the afternoon session along with U.S. futures.





This post has been edited by TechMan: Feb 19 2012, 11:31 PM

[TechMan]

Looks like signs of risk aversion ahead of the "fully expected" second Greek bailout fund approval.

The Dollar Index has quietly moved back above 9790. The Yen's gaining ground on both the Euro and the Dollar. And, the Yen had also filled the gap and recovered nearly all the losses against the Aussie dollar.

WSJ: Euro zone headline fatigue. No kidding.