Charts I’m Watching: May 22, 2013

NOTE:  Most of you outside the US are now able to access the site, aside from a few in Europe and Asia.  So, the propagation should be nearly complete.   Apparently the links on previous posts need to also convert over from https to http. 

There’s a process that will do this automatically for every one of the links in the past 700 posts, but I’m hesitant to try it until after the close today.  In the meantime, I’ll go through and update charts on various index pages, which should deal with the more immediate problem.  

On a positive note, Disqus is working much better now with the elimination of SSL.  You can not only edit comments, but attaching charts is a snap.

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Futures are pointed higher this morning, but there shouldn’t be too much action until Bernanke’s comments.  I won’t chase it without a break of 1675.

The dollar has channeled higher since bottoming at 83.735 overnight.  I would still like to see a little further downside — to the bottom of the purple channel in order for the downside to trigger in equities.  The white .886 is at 83.678 and intersects the channel bottom around 7pm ET.

Our target was 83.609, as that established a 1.618 extension at an intersection with the 1.618 of the decline from Apr 4.  Interesting that the dollar is trending up in advance of Bernanke’s testimony…

…especially in light of the EURUSD’s push higher. The small falling channel in the pair would argue for a move slightly higher – perhaps to 1.2993 or so.



There’s the push through 1675, so an interim long position is triggered here.  I’ll probably close it if/when DX hits 83.609.

Charts in a moment

DX is closing in on 83.609, but hasn’t quite tagged the channel.  Perhaps at around 83.57.  If that doesn’t hold, the white midline is around 83.52 and offers great support.

EURUSD is closing in on 1.2993, though the 1.618 at 1.3011 is also a good possibility on an overshoot.

I would imagine SPX is heading towards the 2.618 and red channel top at 1686.73.  But, keep an eye on the currencies.  The updated SPX chart:

UPDATE:  10:20 AM

DX just tagged the white channel midline at 83.52.  Should get a very nice bounce here.

EURUSD just tagged the top of the purple channel, slightly overshooting our 1.2993 target to 1.2997.  Look for a strong reversal.

And, SPX is back-testing the red .75 line, likely on its way higher.  I’ll likely close the long position at 1686.73 as long as the currencies are behaving and not breaking out/down.

UPDATE:  10:28 AM

Closing the long position here at 1687 and will revert to full short.  We have reached the top of the red channel and the 2.618 extension of the drop from 1474 to 1343 last fall.

Note that SPX is well above the purple channel line.  So, we should see a sharp reversal.

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