Saturday, February 23, 2013

If This Is A Top, Maybe We Should Think A Bit About What's Ahead

Hi again, everyone. Papa Boule here.

About every 60 to 100 years, humanity goes nuts for a decade or so. I mean paranoid hysterical looney tunes, line-em-up-and-shoot-em-in-the-head crazy.

Crack open a history book and you'll see. You won't find a single century without at least one or two decades of humanity crazily inflicting the worst atrocities imaginable on itself.

And it looks like we're part of a "lucky" generation that gets to see how those kinds of times develop and unfold. We appear to be in the beginning stages of one of those periods.

We have an economy poised to collapse -- if not now, in the near future.

We have a government that has arrogated the right to kill its own citizens (and torture and kill anyone else it wants to) without hearing or trial, and the citizens are okay with it -- scarcely a peep of protest or concern.

(If I were asked to identify one event that signals that the era of the Enlightenment is over and a new Dark Age is beginning, it would be that.)

We have an increasingly polarized and emotionally charged political landscape. And an increasingly polarized economic landscape as well.

Within ten years this country will be completely changed. And there's no guarantee whatsoever that it will be for the better. It could easily be for the worse.

How in the world do you prepare for the unknown? All I can do is share my own ideas, and how I'm preparing. There's no guarantee they'll work. They're just my best guesses.

1. There are going to be plenty of things to be upset about. I'm preparing emotionally by cultivating a habit of letting things go. If you believe in a Higher Power, now's a good time to get into practice of releasing worry and concern to Him (or Her, or whatever you believe in). Protect yourself by developing such habits, and you will be a great example, and better able to be a leader and helper for others during difficult times.

When the news gets really tumultuous and troubling, I intend at some point to just turn off the TV and close the laptop and take a break. I expect the only news I'll really be interested in or need will be the weather forecast.

2. I'm setting aside some cash. It's not a hoard, just some to cover expenses for a while. I'm talking actual cash, in no larger denominations than a twenty. No need to rehash what has been discussed many times about catastrophic deflation, and the possibility of bankrupt banks and limited access to money in bank accounts.

3. I'm thinking about job opportunities. Yes, job opportunities. People can and do make money in hard times. For example, after the crash in Argentina, the private security business boomed. Discount (but nice) clothing stores did well. Teaching classes on most any subject did well. (People had time to fill. Surprisingly, they took classes on most any subject, not just new job skill courses.) Child entertainment did well. (People tend to do nice things for their children no matter how hard the times.) People with vans started shuttle services. The point is, opportunities will be there if you are flexible and willing to try something new.

(Edit: Credit to FerFAL and his blog "Surviving in Argentina" for much of the info here.)

4. I'm prepared to adjust my thinking on what is a "good price," and what the value of a dollar is. For example, let's say I own some rental property, and I have a tenant who is paying $1000 a month. If money deflates and the value of a dollar increases by a factor of 10, he's going to have to take a big pay cut at his job. And I'm going to have to cut his rent. I'm prepared to recognize that though I might only collect $100 a month from him after the cut, that $100 will have the same spending power as the $1000 I previously collected. I'm also prepared to adjust for the reverse, if, after a period of deflation, we get runaway inflation.

5. I'm prepared to stay cool and avoid getting swept up in any demagoguery and ethnic blame that may flourish during really hard times, no matter who is singled out as a target. I hope others are likewise prepared, and willing to keep a level head and stay compassionate.

6. I've accumulated lots of different shades of gray clothes (not quite fifty shades, though). Now that one may strike you as odd. But here's the deal -- hard times bring rising crime. And one way to avoid being a target is to be a "gray" person who doesn't attract attention. And it seems silly, because it's so literal, but obvious -- actually dressing in muted colors like gray is a great way to be less of an attention-getter. Gray attracts less attention than black even.

And on a somewhat related note, I've read a time or two that long guns are not a good idea in periods of high crime. If crime escalates, law enforcement is going to be stressed out and on edge, and they're not going to feel real comfortable with citizens walking around with rifles and shotguns. Making the police nervous when they're already nervous is just not a good idea. Better to conceal carry a handgun, if you feel safer with a gun.

All this talk may be jumping the gun (ouch) if this isn't a top, or if another way is found to extend some more. But I'd rather think about these things in advance and be prepared in some way, even if just emotionally, than to be caught totally by surprise.

Trade safe and play nice, everyone!

74 comments:

  1. I think I speak on behalf of many.

    I'm tired of waiting for the Zombie Apocalypse.
    --

    So..I should go order a nice grey coat..Hmm, its an idea.

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  2. since we are spiritually speaking (we need more) the good book says the the stars and planets tell us of seasons and signs....like full moon/ new moon trading ...well any way the planet uranus has an 84 year cycle around the sun...jupiter 12yr and saturn 29.5....now I'm sure you can figure out where the market went 84 yrs. ago when these planets were where they are today??? that's right ...1929...in fact uranus and jupiter will be exactly on track while saturn will not be quite where it was when the "BIG ONE" took place... but close enough??? we'll see..

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  3. Given their penchant for graaaaayyy matter, maybe we're playing right into the zombies hands (jaws?) with the wardrobe changes...

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  4. Reading that, for some reason I just remembered the last time a bunch of Americans dressed in gray all at once. Didn't work so well that time.

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  5. Err...what time was that?

    Yours...a red coat.

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  6. This is all making me want to go online clothese shopping more than anything else.

    Bullish XRT, perhaps?

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  7. Thank you Papa Boule, I appreciate you sharing your thoughts on how to prepare.  That's been on my mind for two years, and haven't done much preparations other that start gathering some cash.  I'd feel calmer with more preparations, and I like the idea to cultivate more spiritual habits ... meditation is my favorite.  A bible-oriented friend also recommended praying for guidance as to next steps we are called to take to prepare or protect our families.  Does feel like the top is here.

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  8. The 1930's they all seemed to have gray coats, but I guess that's because it was black and white photograhs.  Haha.

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  9. what if this will be a greater depression than the 1930s? the debt (as % of GDP) that can (and must) be deflated has already grown to exceed the malinvestment of the Roaring Twenties.

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  10.  great observation stockyard. the universe is quite powerful.

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  11. Thanks PB. Agree. Hope for the best but prepare for the worst. All is out of balance and the pendulum ALWAYS swings back, every...single....time.

    Here's a good group of charts from someone I follow on twitter. Draw your own conclusions.

    http://inter-market-analysis.com/

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  12. good article for those who have time.

    http://www.zerohedge.com/news/2013-02-23/memo-japan-it-going-be-cold-winter

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  13. I received a cold call about a year ago from a gold/silver metals salesman who told me there company is targeting $200 per ounce silver for a top target.  My reply was to tell the salesman, do you have any idea of the state of the economy if that prediction comes true?  My suggestion was I will need more than silver if the prediction comes true.   Suppose he is correct won't I be better owning pre1964  dimes?  For change/barter of course.   http://youtu.be/4F4yT0KAMyo    Imagine owning 10,000 dimes  nitram

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  14. And those hats. Every man wore a hat. What was up with all those hats.

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  15. It's interesting how silver never recoupled to its traditional ratio value to gold during this gold run. Never came close.

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  16. The America is a 3,000 mile wide Yugoslavia. Pity we scrapped that quaint melting-pot model.

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  17. "One can honestly say that the game has been rigged and this is an
    accurate statement but it makes no difference; this is the game that we
    have been given to play. Investors get to make all kinds of choices but
    we do not make the rules and arguing with reality may be an interesting
    academic exercise but it changes nothing in the end.
    "
    The Other Side Of The Coin" from Mark Grant via ZH.

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  18. Christian GustafsonFebruary 24, 2013 at 1:11 PM

    Anyone who still uses the term "investment" is lying or naive.

    We are all speculators now.

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  19. yen selling off hard .. $USDJPY ↑70 pips pre-market -> kuroda: the 'doviest' dove of all

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  20. Caution for USDJPY bulls
    http://screencast.com/t/UIGhcztxoAL
    DK

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  21. Terrific post, Papa. Common sense, humanity and humility never goes out of fashion. On that theme, if I could recommend a couple of websites/blogs to add to your favourites which might help people keep perspective through rocky times, I'd go for www.chrismartenson.com (twitter: @chrismartenson), www.theautomaticearth.org (@AutomaticEarth) and www.oftwominds.com/blog (@chsm1th). Chris's outlook tends towards inflation and the other two are adamant deflationists, so all bases are covered in that respect.

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  22. GBPUSD broke through 1.51 an hour or so ago, presumably in reaction to the UK's Moody's downgrade on Friday.

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  23.  wonder where it will catch some support. 14850ish? wow. the short of the year and i wasn't participating.

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  24. usdjpy gapped up over 100 pips on the Kuroda unofficial official appt. by Abe.

    ouch. that hurt. had a tight stop on my short but broker doesn't honor stops in fast moving market. filled 80 pips above my stop.

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  25. I like SJ's strategy - stay away from Sunday nights.
    Although I broke it by shorting this afternoon's rip in EURGBP

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  26. I now think Greg was right.

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  27.  nice! i shorted the rip on usdjpy as a gap fill play.

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  28.  i'm so confused. so much comes into play if market goes risk-off in a big way and dollar surges. those are IFs though, otherwise the moon's the limit with the yen crosses.

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  29. Hi Guys & Gals..

    It's time... to..die.....

    dkdeathorglory.blogspot.com

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  30. Great article PB, thanks for your contribution!

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  31.  I liked all those hats ... made for nice looking pictures ... maybe hats will come back in fashion when the sky is falling again.

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  32. Congratulations!  Glad to see you have a blog, and I will be a frequent visitor you can be sure.
    Here's to the Holy Grail Trades.  {Clink}

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  33. I sometimes I walk around my suburban neighbourhood and outskirts of nearby woods at 11pm-midnight. No flashlight, just a baton.

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  34.  Do you think we might be in the beginning stages (or starting iii) of an extended fifth wave of a third minor wave on our hands?

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  35.  I thought I read something that the doviest one would have been Iwata.  But Kuroda is better than Muto.  I don't know anything about any of them ... but that they all sound Japanese to me.  I think it's a sign of the times that there were rumors of the hawkiest one (Muto) floated out there last week as a ruse.  Abe would never have gone for that.  And all the talk of Abe backing away from buying foreign bonds .. much news turned out to be a way to steal people's longs it seemed.  They don't play fair.  No, not at all.  You start seeing how the news is just dead wrong a good bit.

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  36.  and if market goes risk off, yen will probably bounce. i know Greg, you say it's not a safe haven currency, but i think it still is. so if yen bounces and usd bounces, where does that leave usdjpy? will depends on which bounces harder i guess.

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  37.  yes because after that unofficial official announcement there came another announcement....."now time to play coy: AMARI SAY HE DOESN’T KNOW IF KURODA WILL BE BOJ GOV. CANDIDATE" so much BS!

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  38. I guess we'll never know if it's an extended fifth or extended third until it's all over. I do think we'll fill today's gap and see 3% - 5% more upside after we break out of this months range.

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  39.  i agree on the gap fill and upside if we break up out of the range.

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  40. This is something I've thought a lot about, and the one thing that always comes to mind is firearms. Many people feel it's their duty to arm themselves to defend their family and community in the event of some catastrophe. I have friends and family who are really serious about this. And I'm not talking about media hyped stereotypical doomer prepper BS. I'm talking about educated professionals who feel a true responsibility.

    I'm in total agreement with their philosophy, belief system, and sense of duty and fully support all of it. However, although I'm no stranger to weaponry I don't feel this same call. Guns serve a purpose, yes, but a purpose that I will be serving in hopefully other ways.

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  41. Yo... Mars.  It's nice to see you figured out how to leave a comment here.  Welcome buddy.

    For those of you who are 'regulars' here, Mars is a good friend of mine from Pretzel's site.  Another Aussie with a hell of a talent with the charts.  Seriously, he and DarkestKnight have some really, really good EWT talents and let's just hope Mars might find the time to share some of his counts here, as he does at Pretzel's.  Pretzel is a good friend of mine as well and I'm sure he understands that all of you, all bloggers participate on several different sites, just like I do.  So welcome Mars and I 'do' hope my readers get to see a few examples of your talents.

    Thanks for dropping in.  By the way, as in the custom here, the first few dozen are on the house.

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  42. I thought you looked familiar!

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  43. Well what do you know?  Way to go DK and congrats.  That's going to be a very popular site and I'll be a regular.  Thanks for hooking it up with my blog here and obviously I've returned the honour.

    How ironic this is... this, on the same night that 'the other Australian', Mars, dropped in here for the first time ever.  You two would hit it off great because both of you have serious, seriously good talents with EWT and charting.  If I'm not mistaken, Mars is fairly new to Blogger.  Oh wait... I just saw a private message from him.  He 'does' have a Google identity and an avatar but he just had a question about email.  So I think we'll see his avatar in the future.  I'm not sure what Mars' avatar is but it looks like some sort of planet or something.  Maybe Jupiter, I dunno for sure.

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  44. Well
    what do you know?  Way to go DK and congrats.  That's going to be a
    very popular site and I'll be a regular.  Thanks for hooking it up with
    my blog here and obviously I've returned the honour.



    How ironic is this?  You premier your brand spanking new blog on the same night that 'the other
    Australian'
    , Mars, dropped in here for the first time ever.  I know you're a British expat but we still think of you as an Aussie.  You two
    would hit it off great because both of you have serious, seriously good
    talents with EWT and charting.  If I'm not mistaken, Mars is fairly new
    to Blogger so he might not have an avatar for Blogger yet.  Oh wait... I just saw a private message from him.  He
    'does' have a Google identity and an avatar but he just had a question
    about email.  I was able to answer his question so I think we'll see his avatar in the future.  I'm not
    sure what Mars' avatar is but it looks like some sort of planet or
    something.  Maybe Jupiter, I dunno for sure.

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  45. Haha, hi there Christian.  Nice to see you drop in, and welcome.  I like your perspectives over there on your blog and I encourage my readers to learn that your site is out there.  Folks, you can find it by clicking Christian's name and it's over there in the blog roll as well.  And is custom around here Christian, when people post here for the first time the first few dozen or so are on the house.  So help yourself.

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  46. A few of the younger guys around here are starting to wear them now.  Not very many but they look real sharp.  The brims aren't very wide and I'm thinking about getting one for myself.  They look kind of like these.  I think the right fedora on the right guy can look terrific:

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  47.  Great title for a blog DK  !   GL am sure it will be a deserved success !

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  48. Bookmarked. And I'll be looking in often. That potential AUD/JPY setup is, well, breathtaking.

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  49. I hope your crime fighting costume doesn't look just like mine because that would be awkward.

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  50. And I'm so damned pleased that Mars decided to swing over there and introduce himself.  Those two guys could be a dynamic duo if there ever was one.  Wait until you see Mars' talent with EWT.  It would just 'compliment' DK's skills... and vice versa.  This is gonna be fun.

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  51. OMG.... I think I just cracked a rib. 

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  52. Cable is so weak it's pathetic. Everybody is so short this thing. There's got to be a bottom here somewhere. 
    I liked your observation about AUDCAD. That short looks most promising to me today.

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  53. Papa_Boule said it best, but it's worth reminding ourselves that the most important thing to start defending is our own thoughts and in our own hearts.

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  54. I here you Papa and then some.  I live in a very rural and remote area in Western Wisconsin.  Moved here 22 years ago from Chicago area where I grew up. I moved here on the firm belief that serious trouble awaited in the future, and I wanted my family in a safer place. 
    I'm an old geezer, so I may not be around for what may happen, but I'm really concerned for my children and grandchildren.

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  55. Evening all.
    Thanks to all for the supportive comments re 'Death or Glory!'
    As you can see I've been working feverishly over the last 24 hours to set up the new blog after a restless night pondering my next move.
    It might be fun viewing, or maybe a damp squib...as I said, I'm not risking much, so it's a shot-to-nothing.

    re BOJ easing policy - can anyone tell me what exactly they have done that is CONCRETE?
    They have been trying to create inflation for the last 20 years.
    As far as I can tell any new program doesn't actually start until 2014, and what we have seen so far is simply hot air.
    Thanks
    DK

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  56. That's why we count waves - so we don't have to pay attention to the news. 

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  57. As per Papa's suggestion, I have published another post because PB figured his piece was perhaps a bit too gloomy.  So I simply updated the HO page and posted it as a new article.  In the process I deleted the original HO article although 100% of its content is contained in the new post.  But the comments that were attached to the original have vanished.  I didn't think of that and I apologize for any inconvenience that may have caused any of you.

    There's not much new on the HO update, it was really just a case of bumping PB's article at his request.  Nonetheless, if interested you could find it here:
    http://albertarocks-ta-discussions.blogspot.ca/2013/02/hindenburg-omen-settles-right-down-but.html

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  58. Cool AR, just posted a couple o' charts on the new thread. :)

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  59. Of course. 
    I guess I'm trying to compile more evidence for my theory of continued Yen strength and will accept all the help I can get -even funnymentals, as AR would say.

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  60. I'm not sure I've ever referred to them as "funnymentals" but I know 'you are' a funny mental guy.  Here's the Yen monthly chart that I posted a few weeks back with the same annotations I'd put on it back then.  So far it's working or more or less as I thought it might.  Of course we're still on the same candle as when I posted the chart but it has deepened.  I still think this is what we're probably going to get.  I really think the 98 level is the target because it represents 'parity' (one Yen per penny) and it was formerly a resistance level.  I think 98 is more or less a 'natural'.

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  61. Just thinking about caveats - page 83"

    "E waves in triangles appear to most market observers to be the dramatic kickoff of a new downtrend after a top has been built. They almost always are accompanied by strongly supportive news. That, in conjunction with the tendency of E waves to stage a false breakdown through the triangle boundary line, intensifies the bearish conviction of market participants at precisely the time that they should be preparing for a  substantial move in the opposite direction. Thus, E wave, being ending waves, are attended by a psychology as emotional as that of fifth waves."

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  62. I'm not sure I've ever referred to them as "funnymentals" but I know 'you are' a funny mental guy.  Here's the Yen monthly chart that I posted a few weeks back with the same annotations I'd put on it back then.  So far it's working or more or less as I thought it might.  Of course we're still on the same candle as when I posted the chart but it has deepened.  I still think this is what we're probably going to get.  I really think the 98 level is the target because it represents 'parity' (one Yen per penny) and it was formerly a resistance level.  I think 98 is more or less a 'natural'.  On a monthly basis it's nowhere near oversold and before we see the ultimate low in the Yen I'd expect a positive divergence of some sort on the monthly chart.  That occurrence could be a far away as perhaps 3 years.  The next bounce wouldn't produce it.

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  63. I don't imagine you were aware of this, but Canadians just can't follow a musical tempo as it was originally written or intended.  Nonetheless, the message is the same.

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  64. As Gollum would say, "they're tricksey".

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  65. Wow, looks like DK was right.
    Next time I need to remember my tagline my up there.

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  66. I guess now we know wave 3 is decidedly over!  Wave 4 has begun, the chart leaves no ambiguity there!
    Once it broke that channel line authoritatively.  Wow!  You were right about Goldman Sachs needing to get out of their large USDJPY longs.

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  67. Wow, that was one wicked turn ... looks like wave 3 channel broke decisively.  This was one huge move day for the yen and the euro.  Looks like your instinct to short it was right ... just had a stop steal before it was ready to turn -- a false breakout.  What was your clue?  Was it the bollenger band weekly close inside it? 

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  68. Now it's very clear, we now third wave is over.

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  69. Well, it looks like clearly a wave completed today -- either wave 3 or your wave C is complete.  No ambiguity about whether there is any more upside, eh?

    And we either have wave 4 down or your wave 5.

    BOJ easing policy -- I don't know what they've done concrete other than say they will directly be in favor of weakening the yen.  By using their resources to sell yens and buy foreign bonds like US bonds. 

    However, I was thinking the main reason the yen was weakening was because it was being shorted or dumped by people worried about the Japanese debt level -- and future printing necessary to buy up future debt as the country will no longer be able to buy it (with exports falling, recession, aging population, etc), and it was capital fleeing the yen as the main force.  More than the BOJ's easing programs. 

    But as far as the BOJ easing goes, you are right, most was anticipatory thus far.  And there are many profits to take for peeps.

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  70.  it was that diamond top and the death shoot out of the triangle.

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