Bet Your Bottom Dollar

Interesting setup on DX that happens to complement the SPX/COMP/NYA charts posted Monday afternoon.  Check out the RSI trend line support. I’m inclined to believe the next several days will be very good for the dollar.  For equities — not so much.Meanwhile, the EURUSD shows signs of finally breaking down.  Both the pair and the … continue reading →

Going Out on a Limb

In spite of the indecision demonstrated in this morning’s post, I’m seeing a channel set up on the RSI that’s tilting me slightly more bearish.  It’s the dashed, red channel on the chart below. Remember, everything that’s happened since April 4 is technically a back test of a broken rising wedge — unless we break … continue reading →

Next Stop 1462? April 27, 2012

Yesterday we explored the alternate path in detail, noting that one of the two RSI trend lines we’ve been watching had broken, and the second was coming into play. There is the possibility that the downward sloping red, dashed TL will catch it on the way up, but the yellow TL just broken was a … continue reading →

Spain Downgraded: April 26, 2012

S&P cuts Spain two notches, from A to BBB+, based on contracting economy…cites declining disposable income, private sector deleveraging, front-loaded fiscal consolidation and an uncertain outlook for external demand in many of Spain’s key trading partners.

This could be the catalyst for the turn we’ve been wondering about.  It could be the difference between the H&S and analog playing out versus our top alternative.  Notice that we did break the RSI trend line identified the other day (yellow, dashed) but were stopped by the 2nd one we discussed earlier today.  Today’s high was right at the shoulder line of the H&S pattern, and retraced a Fibonacci .707 of the recent 1422-1357 decline.

Keep an eye on the CDS and bond rates for Spain/Portugal/Italy and key regional banks.  Remember, all these rates are available right here, just go to the economics menu and select market data.

On the Verge: April 26, 2012

UPDATE:  5:35 PM S&P cuts Spain two notches, from A to BBB+, based on contracting economy…cites declining disposable income, private sector deleveraging, front-loaded fiscal consolidation and an uncertain outlook for external demand in many of Spain’s key trading partners.   UPDATE:  3:25 PM Here’s a close up of the alternative path, which looks stronger with … continue reading →