Monday, October 8, 2012

Zen Slap

Don't look now, but after last weeks dramatic divergence in the Aussie and the SPX - everyone suddenly became an expert on the Australian economy and their important currency to foreign exchange markets. 

Markets have a way of lulling ones concerns to complacency - and then slapping them in a sudden moment of clarity. Generally speaking - its a good idea to take notice. 



Although the analog has recently strengthened its correlation proportions to the model, it would be a bit presumptuous to expect the middle of the move to unfurl with like distribution. As I have noted before, these models often replicate most acutely at pivots. Like a rock lobbed into a pond, the geometry will replicate with great congruency at the point of entry and dissipate as you move further away from the epicenter of disturbance. 

With that said - and as mentioned in previous notes,  I do have an initial target of ~ 84 for FXA. 

As always - Stay Frosty