Noticing a Pattern in the Yen ETF

I am starting to notice a pattern in the Currency Shares Japanese Yen Trust (ticker: $FXY), the Yen ETF. Take a look at the chart below can you see it? Well actually I am not telling the truth I have been following this for a while. Ok I will give it up. It seems like whenever one of these blue circles appears on the chart it sells off. Pretty simple huh?

Actually the basis for those blue circles is a touch or break of the Bollinger band and a touch above 70 in the Relative Strength Index (RSI) or a pullback in it. It is happening again now. A pullback looks to have support at the gap fill at 126.88 and then the base at 125 below. There are many ways to play this. First you could just short the ETF. You could also buy the August 127/125 Put spread for 65 cents or you could sell the August 129 Calls for 85 cents just to name a few.

There is also a potential catalyst with headlines from the Nikkei news hinting at Currency intervention. I bought the puts for a short term trade. Good luck to you.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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