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A Bad Sign?

Friday, 14 Mar 2008 | 3:59 PM ET

The Japanese yen has been breaking new ground lately. What's it mean for you and your money?

The yen has strengthened significantly against the dollar in the past week explains Oppenheimer Chief Market technician Carter Worth.

One of the great underpinnings of the bull market has been those investors who borrow cheap yen and redeploy that money here in the US in higher yielding instruments. That trend is now being reversed.

There’s an inverse correlation between equity prices and the Japanese yen, he adds. (In other words, as the yen gets stronger stocks go lower.) We could come in on Monday and have a very unhappy day.

How do you trade?

Trade on the side of caution, counsels Worth. If you’re looking for a trade, I like aluminum and steel plays in the materials space.

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