Bears Will Feast If This Correlation Holds Up

The Korean won is key currency for global trade and is heavily influenced by China, it's largest trading partner. USDKRW formed an inverse head-and-shoulders pattern that could carry it to a breakout at around USDKRW 1250. This is key because that in turn completes a basing pattern that points to another 15-20 percent upside in USDKRW.

KRW will probably weaken more then CNY, but that too will likely decline double-digits if this scenario unfolded. Hence, my general bearishness on markets and willingness to sit tight with a heavily-leveraged short portfolio with the risk of a melt-up rally constantly stabbing at my amygdala.

I came across something today that totally confirms my bias. Which is to say, I'm biased. But if you don't see the USDKRW pattern, this chart comports with crazy target of USDKRW around 1450-1500 when this is all over.

The chart doesn't have a clear x-axis, but if the correlation holds, it looks like 6 months of hell is about to unfold for anyone who isn't short various asset classes and long U.S. dollars. I suspect gold will do well, but not as confident. There could be an initial sell-off as the "strong dollar, weak gold" traders and investors are flushed from the market.