By Yaser Anwar, CSC of Equity Investment Ideas
To be successful at trading one has to understanding the inter-market relationships that occur across all trading instruments, from FX to Derivatives to Stocks, as they are all intertwined.
Take a look at the YEN/EURO 10 year chart. Yen is approaching the support of its ’98 lows after falling for over 7 years, the time when institutions leveraged heavily to load up on stocks leading to the Tech bubble burst, also evident on the $XLJ chart alongside the Slow STO signaling oversold.
Could lead to a reversal and end of the carry trade, as the markets have been perceiving. If this occurs, it will be negative for the market, and I’d suggest trading with the trend towards the short-side, till we’re told otherwise, by the charts and price action.
Good hunting.
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