I've actually managed to stay awake until almost 10pm. The indices are looking good; the USDX looks like it is breaking down and the EURX breaking up. I almost have TS signals on these indices but I won't be awake to monitor them. I'd be waiting for next week though most likely anyway, even without jet lag.
Friday 23 /3 (3pm Sydney!)
Yeh! I'm home!
The USDX has continued to bounce around in a sideways fashion but is still below the monthly and weekly pivot and hasn't moved back up over the 80 level. The EURX has been up and then down but it is still trading within the symmetrical triangle. I'm quite tired after a 24 hr flight. I'll look at this again later and over the weekend. What really has me excited though is that this with all this sideways stuff, the ADX and DMIs on both the USDX and the EURX are below the 20 level. This makes it soooooo much easier to spot the next trend break out move. Yeh!
The stock markets are a bit nervous at these new high levels. The S&P slipped to just below the 1,400 level but the DOW is still above 13,000. It is not at all surprising to see some turbulence at these new high levels. There would be some profit taking to as I'm not the only person in the world who would have noted that the the DOW has now made a hugely significant 78.6% retrace from its GFC lows. This will either prove to be turbulence before the next rally or a market top. We just need the trend to kick in so we can trade it! Up, down, don't care.
Wednesday 21/3 (7.30pm Heathrow)The USDX is still bouncing along sideways but has moved above the 79.5 level and 4 hr 200 EMA. It is stuck below the weekly and monthly pivot though. The EURX has bounced off the upper triangle trend line. I have adjusted this a bit more, ever so slightly, so that future nudges against this trend line will be more accurate. This is not cheating, it's what you do. adjust trend lines as new levels of support and resistance evolve.
PS: The US markets have just closed for Wednesday. The DOW is still above 13,000. The S&P500 is still above 1,400 and the VIX is down around 15. The NASDAQ is up though. Not a whole lot of misery or fear there yet. This all gives us clues. It still looks like it is just treading water for the moment. It could still move either way from here, for sure, but whilst the stocks are still bullish, it looks like 'risk on'.
Wednesday 21/3 (8 am Kingston upon Thames)
The indices are looking like they're gearing up for another attempt at 'risk on'. The EURX is trying to break up and out. The USDX is struggling to keep above the 79.5 level and 4hr 200 EMA. I sound like I'm repeating myself but, I am. We are at critical levels so it is not surprising that there is some choppy action before the next major move. That move could be up or down but, to me at the moment, the charts look to be indicating a pause before a continued upward thrust.
The E/J is up now 280 from my signal.
Tuesday 20/3 (9pm Kingston upon Thames )
Hmmm. I'm not surprised but there has been little change since I last posted. These are HUGE new levels we're at so I expect a fair bit of indecision and even turbulence. The indices are, not surprisingly, just bouncing.
Tuesday 20/3 (11.30am Paris)
I've been killing some time whilst waiting for a flight having a look at the stock market charts. The action there looks very bullish indeed. I know this could be a top and a turning point before a fall but, the charts don't look that way at the moment.
The DOW had a strong day yesterday and if you look at the chart you will see how bullish this price action currently looks. Price is holding above the significant 13,000 level quite easily.
The S&P500 looks just as bullish too. I've left in my old trend lines but I wanted to show you this chart before I modify them. The 1,400 level on the S&P500 is a huge psychological level to close above. It is a significant whole number and represents a close above the 78.6% Fib level retrace since the 2009 lows of 657!
There is red flag US data out later today. This may jog things along. Either way though, I think the broader markets have recently made significant highs and closes above huge psychological levels. I wouldn't be surprised if there was some more sideways action whilst the market digests these new levels. This could be a market top or it could be the starting point of a new rally but, either way, these are very significant levels that we are seeing.
This has a flow on effect for currencies. A rallying stock market is usually accompanied by a falling USD. I will be watching with interest to see if this usual correlation persists.
Tuesday 20/3 (8.30 am Paris)This has a flow on effect for currencies. A rallying stock market is usually accompanied by a falling USD. I will be watching with interest to see if this usual correlation persists.
Not a whole lot has changed during the Asian session. The USDX is currently trying to re-test the 79.5 level and 4hr 200 EMA. I'd really want to see this index close above the 80 level though before I'd be thinking we were really back to 'risk off'. The EURX still has not broken out from the triangle pattern. I did relax the upper trend line a bit to contain all the 4hr price action.
Some ramblings: I have been thinking about the the EUR and USD their usual inverse correlation; that is, as one goes up the other tends to go down. This has been brought on by spending some time over here in both GBP and EUR land. If the stock market does continue to rally and if there is continued market optimism, then, the USD usually falls along side of this pattern. Then, often, a consequence of this optimism and 'risk on' sentiment is to see a rising EUR. I'm wondering though, whether old correlations might just move on to form new patterns and relationships and de-couple from their old ones. I actually can't understand why the EURO is higher than the USD at all or, for that matter, why it is higher than the AUD! There seems to be a shift in global order and power and I don't think that either the USD, EUR or GBP are going to be at the front of the pack for much longer. Someone needs to tell them all this. They are all scrambling around, trying to get their footing back, but they don't seem to see the big 'elephant in the room', that is, the new emerging economies. I think we're all going to need to find the ticker symbols for the likes of the Chinese Yuan and the Indian Rupee!
Monday 19/3 (8pm Paris)
We've been out to Champagne all day. Even without the bubbles I would be enjoying the current price action on the indices. The USDX has fallen further and is now back below the 79.5 area and below the 4hr 200 EMA. The EURX is butting up against the top of the symmetrical triangle. More confirmation is needed by way of a break hold and close above the trend line for the EURX but it is still looking bullish at the moment for sure.
E/J: The E/J has moved further with the risk on appetite and is up around 200 pips since the break out.
G/U: this is getting really interesting. If 'risk on' holds a long at the 1.6 / trend line break area will be for me even though I loathe this pair!
E/U: Interestingly, I don't have a signal to 'long' this pair yet. maybe the herd is waiting to see if it can clear the monthly pivot.
It is a mad irony that with increased risk appetite the USD falls but, that the EUR, generally, rallies as a consequence. Like I keep saying, I can't see how or why the EUR should be rallying but, I will trade what I see, when I can. If we move back to 'risk off' though I will look for a bottom trend line break and TS signal.
USD/SGD: This pair is setting up nicely too if the 'risk on' rally continues. Conversely, if we move to 'risk off' I'd look in the upward direction for a trend line break there.
I'm back home in a few days. I miss my kids and I miss my dog but, also, I really miss my trading. I LOVE it!
Trading Week 19/3/2012
I will still be traveling a bit during this week and so I won't get much opportunity to post. I get back to Sydney this coming Friday!
USD/SGD: This pair is setting up nicely too if the 'risk on' rally continues. Conversely, if we move to 'risk off' I'd look in the upward direction for a trend line break there.
I'm back home in a few days. I miss my kids and I miss my dog but, also, I really miss my trading. I LOVE it!
Trading Week 19/3/2012
I will still be traveling a bit during this week and so I won't get much opportunity to post. I get back to Sydney this coming Friday!
The key pairs on my watch list though are the E/U, E/J, A/J, G/U and USD/SGD.
Please also note that I have updated my previous post from the weekend, Indices Review and Trading Week Analysis, since you may have last viewed this. If so, please go back and check my updates about the E/J and USD/SGD.
Although the broader markets are making new highs and this does all look quite bullish, I will be watching with vigilance and with an eye for caution. This may also evolve to be a market top before a new pullback. I just know that we are in a delicate position here at these current levels and with the markets making new highs and, also, seeming to want to push higher. The VIX, also, is at new low levels and this may all seem to be too good to be true. I still think the 80 level on the USDX is the critical level to watch for in determining whether we stay with 'risk on' or revert to 'risk off'. Make sure you check you trading calendar but, also, unscheduled news items and announcements from the Euro zone area continue to be problematic for the technical trader.
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