What’s The Message Of These 4 Risk Indicators? Markets Are Lined Up For Risk On

It seems that the Brexit impact has run its course. Or have markets already taken a Brexit scenario into account? Or did they initially overestimate the Brexit impact. Or is the financial situation looking bright in the coming months (as markets typically ‘look’ 3 to 6 months ahead in time)?

Actually, we do not know the answer, and, to be honest, we do not care. Nobody will ever know exactly the rationale of a market trend. The only thing we can identify, however, is the trend itself, and, as a precursor, indicators which point to the formation of a new trend. So why speculate if the only thing you have to do as an investor is to simply follow market movement(s)?

This, dear reader, is a huge trap to 90% of investors. They try to read as much as they can, and, based on news / events / opinions, anticipate what that means to markets. The big problem with this is that the investor has to ‘interpret’ the ‘meaning’ of news and events. Moreover, the market entails a large group of people which have much more information at their disposal (as a group).

Investors should take a different stance against collecting and interpreting information. They should rely less on news and opinions from others. The right path is to read the messages of the market, which is available throughout a collection of charts. That is why, at Investing Haven, we have developed a chart based methodology which delivers all the messages an investor needs to have at his disposal.

As for developing market activity, we see a clear and concise pattern, which suggests that the start of a new trend is upon is. We derive this conclusion from our 4 fundemantal risk indicators, i.e. the Yen, Treasury Yields, High Yield Bonds and Gold. In particular, their chart patterns are all lined up and point to the same conclusion.

First, the Yen at 100 points has an important meaning. The Yen chart shows how this safe haven currency has arrived at secular resistance. True, the rally in 2016 has been impressive, and it probably has more legs at a certain point in the future, but for now, the rally has most likely run its course. The Yen at 100 points is, as shown on the chart, resistance area. A retracement from here is the most obvious path.