Yen Update 4/22/12

The first chart below shows an update to the yen since the last blog post. It appears it may have bottomed when the mid-March cycle low was due, although the mid-Feb timing that was anticipated did not produce a reversal (but may have kicked off an acceleration down). So far the yen has rallied a few weeks and, as of 3/20/12, has corrected .382 of that rally. Looking at previous up-legs in this larger rising wedge pattern that started in 2007, the current rally phase may end up looking somewhat similar to the Aug to Dec 2008 rally, though this is just a guess at this point. That rally [wave 1 (red) of wave 3] went 27.79 pts in 80 trading days and included 3 corrections of 54% along the way. The retracement of the current Mar 2012 rally could hold the 38.2% or could easily retrace 50% to 78% without invalidating the preferred count, which is wave 4 has bottomed and wave 5 is on its way up to a new high above the 2011 highs. The small red circles show where we may be in relation to the 2008 rally and first retracement. A break below the 118.89 low on 3/15/12 would call into question the entire scenario of an unfolding blow-off to the upside. The most likely target range for the end of wave 5 is the 140 to 144 area (by late June to mid July), with an outside chance of 162. The other two charts show a zoom in of the 2008 rally and the current market price action. Kim Rice 4/22/12