Thursday, January 27, 2011


It's always a bummer when your credit rating takes a hit. Just ask Japan, who was downgraded by Standard & Poor's from AA to AA-.

The yen, unsurprisingly, also took a hit, popping the (USD/JPY) currency pair out of bear phase into neutrality on the pfe/pps analysis, with trading that has spanned ¥1.192, or 1.5%, in the five hours since midnight U.S. Eastern time.

phase pfeppstrend

What interests me is the small magnitude of the response.

The high so far today brought the pair back up to levels below the highs of a mere 15 days ago. The 50-day moving average is providing a halting point so far today, as it has every day for the past 14 days. Today's high (so far) is a full ¥0.472 below the month's high set on Jan. 7.

So despite the drama that will infuse the reporting of the downgrade in creditworthiness, the market, prior to the opening of New York trading, is delivering a verdict of "No big!"

Reversal Levels
  • ¥84.505, +1.8% (dec. swing high)
  • ¥83.679, +0.8% (jan. swing high)
  • ¥83.066, +0.03% (50-day moving average)
  • ¥83.040 --- You are here.
  • ¥82.595, -0.5% (20-day moving average)
  • ¥81.844, -1.4% (jan. swing low)
  • ¥80.934, -2.5% (dec. swing low)

Long-term, the dollar has been falling against the yen since August 1998. This is the eighth month of the current bear phase on the slow-trading chart.

Monthly chart
phase pfeppstrend

Price channel analysis, using the 55-day average for entry and the 20-day for exit, shows USD/JPY as being in neutral phase, with the price standing a full yen below the breakout point of ¥84.505.

Table Abbreviations:
  • pfe - Location of the polarized fractal efficiency line.
  • pps - Person's Proprietary Signal mode.
  • trend - Trend of the polarized fractal efficiency line.

Key to the PPS/PFE tables
phase bull phase
bear phase
pfe +100 and above
+50 to below 100
0 to below +50
below 0 to above -50
-50 to above -100
below -100
pps bull confirmation
bear confirmation
trend uptrend
no trend

More on the PFE/PPS analysis

Read a detailed explanation of the analytical tools and how they’re used, including trading rules.

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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