Major part of the rally in US stocks since late 2012 appears to have been fuelled by Yen carry trade. Remember Bank of Japan was the first one to fire and the stage was set after Abe came to power. BOJ announced easing in April 2013 and followed it with another surprise in October 2014.
BOJ's aggressive actions also forced ECB and other central banks to press the easing button.
However, the situation now is Yen is not in mood to weaken, markets are not responding positively to aggressive central bank actions and oil has already doubled from its bottom in February. Moreover, oil helped indices recover from Feb lows even though funding currencies like JPY, EUR were on the rise.
Hence, oil better stay resilient other wise, odds of a corrective move in Dow would rise. From technical perspective a break below rising trend line (black) could bring in chart driven bears as well.
BOJ's aggressive actions also forced ECB and other central banks to press the easing button.
However, the situation now is Yen is not in mood to weaken, markets are not responding positively to aggressive central bank actions and oil has already doubled from its bottom in February. Moreover, oil helped indices recover from Feb lows even though funding currencies like JPY, EUR were on the rise.
Hence, oil better stay resilient other wise, odds of a corrective move in Dow would rise. From technical perspective a break below rising trend line (black) could bring in chart driven bears as well.