JYH10

An impressive selloff in the yen suggests that the recent uptrend has reversed.  The futures have come within one pip of a midpoint pivot  at 1.1187 and are trading nearby as we write.  If that level does not hold, the sibling D target at 1.1128 will be the next objective.  You could bottom-fish that number with a stop-loss as tight as 4-5 ticks.  ______ UPDATE:  The futures crashed both supports, making the suggested five-tick stop-loss unmanageable unless you were either very nimble or lucky.  Now, the futures appear bound for a test of structural support near 1.0860.

An accurate bounce off of a midpoint pivot followed by a sharp breach suggests that the Yen futures are headed for a D target at 1.0890.  To get there, they will have to cut through a midpoint pivot of 1.0903 which comes from a large pattern on the daily chart. ______ UPDATE (11:06 a.m. EST): The yen rallied enough to cancel the 1.0890 target, but 1.0903 remains active. ______ FURTHER UPDATE (05:18 p.m. EST): The Fed discount rate announcement sent the yen into a dive.  The 1.0903 midpoint pivot was exceeded very narrowly, by ten pips, before the session ended.

A small, elegant pattern on the hourly chart points to a hidden pivot at 1.1024 which can be bottom-fished.  A buy at 1.1025 with a stop at 1.1019 would risk a theoretical $75 per contract.  If the yen moves substantially lower, it should find support at a hidden pivot of 1.0903. ______ UPDATE (07:42 a.m. EST): We were filled on our 1.1025 order, after which the market bounced to as high as 1.1036.  We had time to move stops to breakeven, but profit potential was small, so let's call the trade a wash.  The D target and subsequently the round number of 1.1000 were breached, suggesting that the 1.0903 midpoint pivot from a large daily pattern is now in play.

A compelling bearish pattern on the daily chart served us well yesterday, and now we should pay close attention to its midpoint at 1.0834. To play for a bounce, bid 1.0838 with a stop at 1.0824. This pattern points all the way down to a D target at 1.0447. ______ UPDATE:  The futures rallied from yesterday's low without looking back, negating our buying strategy.

The daily chart is persuasively bearish, having tripped a conventional short entry on Friday at 1.1028. Moreover, and adding to a picture of short-term weakness, is the fact that no rally since then has exceeded any prior peaks even on the lowly 5-minute chart.  So how do we get short with the least amount of risk? My suggestion would be to wait until the futures break below the 1.1031  midpoint support shown in the chart.  Thereafter, you should look on the 1- and 3-minute charts either for entry with-the-trend at Lindsay's point 'X'; or at the 'p' midpoint or 'd' target of a minor retracement rally. I've sketched the first idea in the accompanying chart. ______ UPDATE (10:15 a.m. EST):  The chart foretold this morning's price action almost exactly, and the hypothetical trade illustrated would have been a solid winner.  The CME shows a plunge moments ago to 1.0968 that could be a misprint, but in any event, the futures appeared to have traded down to at least 1.0995 after tripping a short-entry signal at 1.1021. (3-min chart, A=1.1041, B=1.1005, and C=1.1030).