Foreign exchange expert Kathy Lien says we can get a clue about where the market's going next by looking at just one currency pair: the dollar-yen.
Lien, managing director of FX strategy with BK Asset Management, says that judging by the Japanese yen, the odds of U.S. stocks bouncing back after four losing sessions are slim.
"Right now, I'm quite worried about the lower highs and lower lows that we're seeing in dollar/yen," she said. "Until we get back above 120, I think that this signals that we could possibly have further risk aversion and downside in U.S. equities."
The yen traded as low as 118.32 in early-morning trading on Thursday before moving a bit higher.
The dollar has recently fallen a bit against the Japanese currency, as the broader greenback rally has cooled. Generally, the dollar has risen against the yen in "risk-on" times when traders have been feeling optimistic, and fallen as traders become more cautious. And with the dollar showing little strength against the yen on Thursday, Lien anticipated that the cautious maneuvering will continue.