Yen Retest of Megaphone VWAP From Below Clears the Decks for a Plunge

Yen Retested VWAP From Below and Closed Beneath It

Yen Retested VWAP From Below and Closed Under

Yen futures retested their megaphone VWAP from below and unlike last time closed beneath it. That is a set-up to short if you’re not short already.

The yen is all clear now not only for a trip to the megaphone bottom, but also for a breakout through the megaphone bottom.

SPY Ascending Megaphone Breakout Should Lead to Spike

SPY Ascending Megaphone Breakout

SPY Ascending Megaphone Breakout

You often see two false breakouts from rising or falling wedges (including rising or falling megaphones) before the real breakout.

SPY had two false breakouts from its rising megaphone (orange lines on the chart) before its third breakout on October 22. Now the price needs to retest the top of the rising megaphone. It could also do something like form a triangle across the top. But this dip hasn’t reached the top yet. See close-up below.

Close-up of SPY Breakout Through Ascending Megaphone Top

Close-up of SPY Breakout Through Ascending Megaphone Top

I’ve mentioned before that in order to complete, the orange rising megaphone needs a substantial spike through the top. It should look something like the one that completed gold’s rising megaphone.

Gold's Rising Megaphone Completed with a Spike

Gold’s Rising Megaphone Completed with a Spike

Since this is the third breakout for SPY, this one would usually lead into the spike.

 

Dollar Reaches Megaphone VWAP

DX Reaches Area of Orange Megaphone VWAP

DX Reaches Area of Orange Megaphone VWAP

The DX has reached the area of its orange megaphone VWAP. It can either turn here and break out the bottom of the megaphone, or it can break out upwards through VWAP heading to the megaphone top. We should then see a retest of VWAP before a breakout through the top of the orange megaphone.

The upward breakouts are more likely but not guaranteed.