Diamond Rally In Yen
The yen is spurting higher out of a diamond-bottom formation,
rallying after officials in Tokyo intimated that Japanese interest rates will
soon come off near-zero levels and narrow the gap between US and Europe yields.
Higher interest rates in Japan would attract dollars as yen-denominated assets
became more valuable. In Wednesday’s futures market recap, I pointed out how the
yen was tracing higher highs out of a diamond bottom.Â
Crude oil, from the Momentum-5
List, is continuing to rally out of a 1-2-3-4 pullback from highs setup. The
move higher comes even though OPEC said they would increase production by
700,000 barrels a day at a meeting in Vienna Wednesday.
Higher oil prices are affecting equities as higher
transportation and energy costs are seen as cutting into corporate profits. Dow
futures are breaking down after hitting a 10-day
low for the third consecutive day. The S&Ps are taking a bigger hit on a
percentage basis and have shed as many as 20 handles in the first two
hours of trading.Â