Blake Young found a correlation that has held for 20 years. It broke this week.
The Australian dollar and Japanese yen trade in step with the S&P 500. Blake ran that relationship back two decades.
It turned non positive in roughly 3% of those weeks. That’s about 20 weeks out of 20 years.
Blake calls the pair his greed and fear gauge. Growth money lifts the Aussie. Uncertainty lifts the yen.
Right now traders are selling the Aussie. They’re covering yen shorts at the same time.
Equities keep pushing higher anyway. That split is the warning.
Volume backs up his caution. The 10 day average on the S&P 500 sits at 33 million shares.
The same week last year averaged over 64 million. Liquidity has been cut nearly in half.
Blake won’t trust any directional move until volume comes back after Labor Day. He wants 50 to 60 million shares before he reads the tape as real.
The dollar sold off almost 1% today. Blake sees that weakness as the only thing propping equities up.
A dollar losing purchasing power doesn’t turn equities into a store of value. Capital shifts out of US markets instead.
Bitcoin ran 5% on the same move. Blake treats it as a risk on asset and takes profit the moment volatility bounces.
His response is rotation. Blake is buying breakouts in markets that don’t depend on the dollar.
Tonight’s video walks through the exact levels and setups:
- SPY trades at 773. A break of 730 opens a 40 to 45 point drop toward 690, right back into the highs from last year.
- EWJ is building an ascending triangle. Blake sees 5% minimum on the breakout, with 88 to 98 giving him a 10% target.
- EEM cleared its Bollinger Band. Blake targets 70 to 71 for a 5% move, then sells calls against the position.
- The WisdomTree Emerging Market Small Cap Dividend Fund pays 5.18% and still lists weekly options. Blake expects roughly 7% on the underlying, then stacks covered calls on top of the dividend.
- EMXC strips China out of emerging markets. Blake maps 99 up to 103 or 104 for another 5% move.
Blake sees 5% to 10% plus dividends across nearly every one of these names. He’s adding to them as the signals confirm.
The US tape is running on a weak dollar and half the normal volume. Blake is positioning where that math doesn’t apply.
