Charts I’m Watching: May 2, 2013

We open this morning with the RUT, which appears for all the world in freefall.

Note that this plunge, if it continues, will complete a rather nasty H&S Pattern around 900 that targets 840.

Which would put it in the neighborhood of the bottom of a rising wedge and the .618 of its leg up from 765.

Initial claims were off 18,000 rather than up slightly.  And, the ECB, as expected, lowered interest rates by .25% — which will goose the markets a bit.

Will it be a lasting pop, or pop and drop?  We’re not really supposed to care.  Let’s hold our noses and jump in.

Taking a spin around the currencies…  DX has had an interesting reaction to something supposedly so bullish…

And, the EURUSD isn’t exactly signalling a rally:

The AUDUSD, which we haven’t looked at lately, is on the edge of a cliff.  Recall that it completed its yellow Crab Pattern a long time ago.  It’s now pondering the white Crab Pattern to the 1.618.

But, it’s formed a triangle (yellow, dotted) that dates back to 2010…

That really looks like it should break to the downside — almost certainly breaking 1.00.

And, our old friend the USDJPY… looks like the bounce may be fizzling — if not downright reversing.

In short, the rest of the world continues to signal a downdraft in stocks.  But, SPX is soaring.

We closed the short position that we adopted on the opening yesterday at the close for a small profit — even though it didn’t quite reach our 1580 target.  I was worried that the ECB rate cut and predictable initial claims report would do…well, exactly what they have done.

We can assume that SPX intends to tag 1600 in the mix of everything.   Could it happen?  Sure, if certain things fall into place.  Maybe even a little bit higher…

continued for members


Sorry, this content is for members only.

Click here to get access.


Already a member? Login below

Remember me (for 2 weeks)

Forgot Password