Extracted From Dec 31, 2013 Market Update
The Yen is still in a corrective stage and as it’s oversold could experience a rally that could last for one to several weeks before it resumes its correction. There are signs now that it will or should test the 118.00 ranges. A test of the 118 ranges will most likely result in a much stronger rally as there is a lot of support in this zone. This relief rally, though strong will fail and eventually 118 will be taken out. Unless the Yen generates a buy signal (and there is no sign of one yet) it should test the 118.00-118.90 ranges. Market update Nov 27, 2012
To indicate that a bottom is in place the Yen should not close below 118.08. A close below this level will indicate that it is ready to test the April 2011 lows. Market update Dec 23. 2012
The Yen was unable to hold the above 118.08 and went to cut right through right through its April 2011 lows. The daily sell signal has shown no signs of letting up, so we are going to modify our exit instructions. The Yen appears to be ready to test the 110 ranges. Therefore, when FXY trades down to the 110 ranges put in orders to close out all positions in YCS. This outlook will remain valid unless a new buy signal is triggered.
As stated in the last update, once the Yen signals that a trad-able bottom is in place. We will be looking to open up positions in FXY. Our preferred method will be to sell puts and use the money from the sale of the puts to purchase calls on FXY.