Currencies are looking for some action, and so far it looks like dollar strengthening — not necessarily good for stocks. I’ll start off short SPX today, preferably at 1690.89 or 1691.96.
The EURUSD’s RW looks like it might be breaking down, though I’d rather the .886 had been tagged first.
UPDATE: 9:31 AM
We got yet another rosy employment report (albeit from ADP), which adds fuel to the taper argument. The GDP beat also gives cover to any stimulus reduction.
Notably, the U.S. and other major developed economies have experienced slower growth in the last five years (blue bars, front row) than Japan experienced in its lost decades (red bar).
UPDATE: 10:26 AM
UPDATE: 12:45 PM
SPX has followed through nicely, just reaching the .500 of the latest move up and the .618 of the drop from 1693 to 1682. It’s also the midline of a small channel (red) that I think might provide the bulls with the opportunity to take a stand.
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It’s not often I get the chance to plug a future competitor. As some of you know, my son Kyle is helping me out this summer. He will graduate in December with an Economics major and Personal Financial Planning minor from Texas Tech University in lovely Lubbock, TX.
In addition to performing many rather thankless duties for me, he has spent a fair amount of time learning the ropes of charting and technical analysis. I asked him his opinion on AAPL the other day, and am pleased to present his analysis. FWIW, I think he did a very nice job.
I hope to lure him back after he graduates for more of the same. Though, he seems pretty excited about the financial planning field. Those of you in the biz who would like to chat with this bright young lad about his career plans, feel free to drop me a line.
Click HERE to read the report.
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UPDATE: 2:04 PM
No change to Fed policy.
My bias is that the broken red channel will ultimately prove more important and the bears will win out. But, TPTB have a very strong interest in propping portraying this as a positive announcement. I imagine they’ll throw a bunch of freshly printed sawbucks at it as usual.
But, I’ll have a hard time getting excited about further upside unless SPX can break back into the rising red channel — call it 1695. Apparently, investors are having the same reaction, as SPX has again stalled back at its lower bound.
Back to the short side unless it can break through. Of course, if it does, there’s the 1698.78 high, the 1696.19 .886, and the psychologically important 1700 to contend with. Stay tuned.
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