Friday, October 22, 2010


US Dollar Index (DX) reversal based on the AB=CD pattern

USDX Weekly chart suggest we have a completed AB=CD pattern that implies a reversal into USD strength with immediate target 79-80.

Stock Market Momentum is topping

My previous target 2950 on Shanghai Composite ( has been met and actually exceeded. Think momentum is Topping here and I expect a rise in Volatility.

S&P still manages to squeeze higher but Momentum is waning.

VIX is like we live in bliss and economy is alright. My assumption is hang there for a while and Volatility spikes higher as some 'fundamental' data or other theme surfaces again. Be it QE2 disappointment, another debt problem or political tension - there is always something to blame for the price action. If anyone cares.

Monday, October 18, 2010

USD/JPY and the 20-MA

The 20-MA works like a Clockwork, especially on the USD/JPY.
Pay special attention to those long shadows on the Candles.

Friday, October 15, 2010

S&P at Resistance - Reversal after QE disappointment?

What we have here?
Candle pattern says Shooting star followed by a Hammer - do we have a signal - I assume at least caution here but we gotta hear what Mr. Bernanke has to tell markets at this critical junction.

Thursday, October 14, 2010

10Y Note /30Y Bond Divergence - Signs of Weakness

10Y Note made Higher High however 30Y Bond might be signalling weakening in the trend of the Fixed Income market which is evident in the Momentum readings.
I could not know if bond vigilantes are rejecting owning a 30Y paper at the current low yields or the FED has more power in suppressing the short to medium term (2-10Y) yields however I take this DIVERGENCE as a sign of pending trend weakness.

Reuters/Jefferies CRB Index near its 200-Week MA

Weekly chart shows CRB is on a Breakout mode and near its 200-Week MA.
Momentum is rising and trend strength is slowly kicking in.
Inflationary times are coming and judging from the chart they will have a long way to go.

Shanghai Composite - Momentum Persists!

Following on my previous call ( on the Momentum strength in SSEC here we are above the 200-Day MA.

Next target is the confluence of the Trend Channel and the previous lows around 2950.

Wednesday, October 13, 2010

USD/JPY - A Tale of Trendlines and Anticipated Breakouts

USD/JPY Hourly Trendline - Works like a clockwork.
A question when it finally break to the upside remains.

US Dollar faces Reversal after FED Minutes suggest further QE

Weekly USD/JPY shows under the Long term Support line - there is possibility for a fake downbreak unless BOJ walks out of it..

Daily USD/JPY shows clear down channel that meets the trend line Support at this critical junction - my test scenario suggests we go for 84.

Nice horizontal Range withing the Rising Trend Channel in 4-hour EUR/USD - so we test 1.4 before we break lower or we see a failure right here?

Same case in 4-hour AUD/USD - Trend lines suggest we go for a test of 0.99 before a significant Resistance kicks in. The surprise will be an outright break here.

US Dollar Index looks like bottoming and yesterday candle resembles a Bullish Engulfment, however today's candle is not a good confirmation sign..
Momentum and RSI suggest we bounce off the Lows which are significant on the long term charts around 77 level and my guess is we see a wave of USD buying after the FED announced its blur willingness to ease further its policy.

Sunday, October 10, 2010

US Dollar Index nearing a Reversal

I bet we reverse at this level near here at least for a short term reaction to the overstretched trend.

Saturday, October 9, 2010

Price action observations & trading system contemplations

Trending and over extension of the move doesn't compromise the trend momentum.

Different time frames and fibs - now that moves exceeded the conservative projections I focus on the momentum concept as it is very insightful to learn never to fight a roaring trend and always let it go until you see a rising volatility, reversal chart pattern or some other sign of trend weakness.

Some observations on using the 13-MA in a trend.
I have drawn the consolidations that follow the price thrusts. Clear Support & Resistance levels are shown.

Time & Price relationship.
MAs are enveloping the unfolding trend but they lag and this actually helps to project a horizontal range trading after the motive wave until the MA makes up the space and then the trend move ensues.

Friday, October 8, 2010

Shanghai Composite - Momentum Buy!

China is on the move up - trend momentum is rising and RSI is converging. Once 2700 is cleared we target the 200-DMA.