Draghi Chokes & Makes A Mess

DXY continued to stalk the 89.62 level from 2009 but has pulled back. Draghi just choked on QE. Euro spiked higher. Futures tanked. Reality briefly reappears and things get messy.

Reality could soon strike elsewhere. 

GMO Capital's James Montier had this to say regarding Abenomics:

To me, there is no evidence that inflation is actually coming back in Japan. The sequencing that Abe has to achieve in order to get inflation back is so difficult. He starts by devaluing the Yen, okay, but what that does is raise import prices, which means the average Japanese person just had a wage cut. That’s deflationary, not inflationary. You may raise the CPI headline, but you are stripping out the ability of the consumer to spend.

He also said: "Stocks are hideously expensive."

I agree.

Plus, if Japanese consumption fails to rise, be on the lookout. Things could get nasty even though it appears as if everything is going great with the Nikkei rising and the yen falling.

Another great find was this gem:

Don't try this: meet the high schooler who made $300K trading penny stocks under his desk

Amazingly, Stocktwits' founder Howard Lindzon encouraged the writer not to cover the story. But then we wouldn't have glorious quotes such as:

"There have been several times where I put every dollar I’ve had on the line, and fortunately it's worked out almost every time." He stops, then corrects himself. "Every time! Or else I’d have nothing."

I love this. We're getting closer to reality each and every day, even though it feels the world has gone mad.

Three scenarios while we wait. A shallow dip before a completed five-wave impulse . . .

A deeper dip before completing a five-wave impulse . . .

Or very close to completion. 1991.40 remains the tell. The upper Fib target remains 2095.06. Anything between here and there is game, including yesterday's high.