Patrick,
I was thinking about this dollar/yen thingy this morning. Trying to learn something here. This is what I came up with, although I think it differs from your post. Please help me out.
OK, if I have this correct, the yen is falling against the dollar. That means $1 today would buy 128 yen. (I think that was the number). However, if it is falling, then $1 tommorrow will buy less yen. Continuing, the Japanese market has been a bear market for several years now coming off of 40,000 down to the mid-14,000 level, again this is off the top, so my numbers might be wrong. The US market has been in a major bull phase for much of that time. I believe the dollar/yen ratio has also gone up. This means that the smart money in Japan probably has fueled a portion of the US market rise and they earned not only the US return on investment, but also the currency return. If they get skittish that they are going to start to lose the currency profits and skittish that the US market is getting ready to roll, then a mass exodus of Japanese money could be the start of a US bear market. Continuing this line of thinking, then the Japanese market is probably poised to move higher was my conclusion as the money will have to flow somewhere, but you were talking about a break in the Nikkei???
I guess I still don't get it. Well, that doesn't surprise me.
-Scott |
