The Bank of Japan, this morning, shocked the world by announcing that it will increase its record breaking 70 Trillion Yen QE program to 80 Trillion Yen and triple its ETF buying program to 3 Trillion Yen.
The USD/JPY forex pair shot through 110 Yen per Dollar and the Nikkei stock index shot 1,000 points through the roof.
The exuberance is being manifest in stock indexes around the globe with the S&P500 also trading close to its all-time high. The downside of the BoJ move, of course, is that it is forcing a move on China whereby Yuan devaluation will become an export market necessity.
Oh, Joy! A new all-time CFD high! 2,023.4 achieved during the Asian session of all times. Divergence (illustrated in magenta) says it’s not destined to continue indefinitely. [author's note: reader @Umi pointed out that this CFD high is not reflected in the actual S&P500 Index.]
S&P500 Weekly Chart
Oh, George W Bush! A new three-year low! $1,166 achieved during the LME witching-hour prior to the London open. Divergence (illustrated in magenta and cyan) says the low is bound to bounce, but it may reach $1000 before doing so. Breaking below $1,180 is a breach of major long-term support and if Gold does not climb above this level quickly, the downside potential could be catastrophic – especially in view of the fact that there is now an established correlation between Gold and Bitcoin.