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18.08.2010 14:43 Wednesday
Yesterday the S&P futures did indeed break the 1093 level that was my key resistance for the day and short covering saw it spike all the way up to 1098.50 high. However the close was weak as it fell below the 1090 level in the last hour of trading. Worth noting that the majority of volume was on the break above 1093 and some selling action above 1097, so looks like it was mostly short covering. Also saw decent volume when it broke below 1093 again on the mover back down in the last hour, which signals selling pressure came back in when traders saw the failure up at 1098.50.

The Euro did not manage to sustain the break above 1.29 as could not keep track of the S&P in the rally, so Euro continue to look weak below this 1.2910 to 1.2920 resistance zone. Heard more chatter that China was selling USD and buying Emerging Market currencies. The BOE minutes out earlier today showed 8-1 vote to maintain interest rates at 0.50% and 9-0 to maintain the Asset Purchase Target at £200B. Some players had been looking for more QE from BOE, which didn’t materialize and GBP was bought back up above 1.56. Interesting to note that GBPUSD tested the 200 day moving average at 1.5498 in early European trading, but it held and after the BOE minutes came out it propelled higher. CAD has done well last few sessions and back below 1.03 now as talk of Chinese reserve diversification and M&A flows following the BHP hostile bid for Potash.

Regarding the JPY it seems that BOJ is not really ready to intervene yet as the move is not sharp enough. Interesting to note as well that CFTC data shows net speculator longs in JPY at 52k contracts, this has happened 3 times in the past and each time it has been followed by a selloff in JPY or averaging 10 figures.

VIX index fell more than 1 point when S&P futures broke 1093 yesterday, but recovered a bit when the rally in S&P reversed. VIX September futures closed at 29.45 yesterday, which is fairly high and my view and it needs to move below 1070 on the S&P to warrant that valuation. Basically the VIX is telling me that the market is pricing itself for a move lower.

The main events on today’s calendar are: DOE Crude Oil inventory data at 16:30 CET and NZD PPI data out at 00:45 August 19th

Technical’s

Euro: Overshoot Friday’s high (1.2906) yesterday by a few pips, but still weak below this level. Since we have that large down candle in the background from last week I favor selling rallies at the moment with possible test of the -3 sigma at 1.2505 in the coming weeks. See support at 1.2730 as well that is a level to keep an eye on.

Cable: Held the 200 day MA at 1.5498 this morning and bounced 170 pips higher since, looks like good support for now and BOE minutes out of the way as well. Key resistance is 1.5710 today and any break above this level could see short covering.

USDJPY: Bounced off -3 sigma at 84.34 last week and now have 0 sigma at 86.30 as main resistance. Need to see a daily close above this level to open for a rally. Keep eye out for possible intervention by BOJ. Probably need to rising interest rates in the US and Europe to see JPY selling off. Also note the high amount of Net speculator longs in JPY (52k contracts), been a turning point history wise.



Swissy: Range trading between 1.0387 and 1.0626, so maybe play range until broken?



AUDUSD: Uptrend with -2 sigma as support coming in at 0.8820 and with more support at 0.8667 (rising support from June lows). Bullish outlook intact above 0.8667 basically. To the upside 0 sigma at 0.9030 act as resistance for today.



USDCAD: Was not able to get above 1.05 on the up move and down below 1.03 again today, which puts focus back towards the downside and first target is -2 sigma at 1.0160 followed by -3 sigma at 1.0080.



S&P Future (ES): Broke above 1093 key resistance yesterday and got up to 1098.50, but closed below the 1093 level. That is somewhat of a weak close and looks more like stop hunting then solid strength. However we have the hammer formation from Monday in the background, so the background signals strength, which should limit the downside near term. Next upside target is 0 sigma at 1103. Key support are at 1074 and 1068 for now.



Gold: Trading in a steady uptrend since start of August and is has broken above the 1220 USD level yesterday that opens for a run towards the all time high at 1268. Be aware of possible no demand bar on daily chart yesterday, which is a bearish bar. Need to see a sell off bar to confirm though.



Crude oil: From Monday: Trading lower in sync with the Euro over the last week and the next real support level I see is the 70.50 low from start of July. Although the downside momentum has been fading last 3 sessions it looks possibly early to go long, would like to see a very low volume down day or possibly a wider up bar closing on the high with expanding volume as the trigger to go long. Yesterday’s bar was a low down volume down bar, so possibly that was the turning point, but we need to see a confirmation in form of a wide up bar closing on the highs in the next few days. I don’t really like the confirmation bar from yesterday, as it closed way off the high on increasing volume, which signals weakness. Will be interesting to see what the inventory data brings today.

所有跟帖： 

• Per-Erik Karlsson, TA= “资本形成”,密度算符 -marketreflections- ♂ (9337 bytes) () 08/18/2010 postreply 11:32:05

• http://www.nasdaq.com/aspx/mostactive.aspx?exchange=nasdaq&mosta -marketreflections- ♂ (73 bytes) () 08/18/2010 postreply 12:56:25

• Keith McCullough：Star Wars traders -marketreflections- ♂ (8796 bytes) () 08/18/2010 postreply 13:15:25

• 回复：The higher the timeframe, the more powerful the setup and lev -marketreflections- ♂ (6499 bytes) () 08/18/2010 postreply 13:27:15

• www.twsinvestments.com The high frequency trading world has very -marketreflections- ♂ (4337 bytes) () 08/18/2010 postreply 13:34:27

• 在一秒前市获悉场交易的消息，是什么交易呢？ -marketreflections- ♂ (1286 bytes) () 08/18/2010 postreply 14:04:18