Today's interesting charts
David Fuller's view Charts
reveal investor sentiment which is a key driver of price trends.
USD/JPY is in its eighth consecutive month of advance (monthly & daily). This is extending the yen's devaluation, albeit from an extremely overbought level, and a close beneath ¥97 would be required to check overall upward momentum and indicate a failed break above the psychological ¥100 level. This latest yen weakness should help to propel the Nikkei 225 (monthly & daily), closer to the 15,000 psychological level, around which a temporary pause may occur.
The S&P 500 (monthly & weekly) and the Dow Jones Industrial Average (monthly & weekly) have equalled or even surpassed their most overextended positions relative to their rising 200-day moving averages since this four-year plus bull market began. Reactions and consolidations from current levels would almost certainly be healthy technical developments. However, this may not occur just yet due to QE without a pre-announced end date from the Fed, plus some exuberant momentum buying in new all-time (numerical) high ground. Nevertheless, further strong gains by the S&P and Dow at this time would most likely cause the Fed to reconsider its policy. This would most likely result in some moderation in the amount of QE that it is currently providing. That would trigger a stock market correction, not least because it is unexpected.