pebblewriter

Tag: EURUSD

  • The Dollar: Currents, See?

    June 10, 2012

    DX flirted with breaking the big purple channel dating back to 1999, but in the end backed off as we expected.

    It’s clear from even a casual glance that DX has to choose between the big purple channel and the smaller one (yellow, dashed) cutting across its mid-section.

    Since reversing as expected on June 1 [see:  Why I’m Buying] DX has done a great job of following our forecast very precisely.  Recall that we were watching for a H&S top at the .618, followed by a series of additional H&S patterns in a cascading effect.

    continued…

    (more…)

  • Oil’s Balancing Act

    Many readers have been asking about oil.  It’s not that I haven’t been interested, it’s just been a real bear to analyze.  Here, after a dozen hours of racking my brain, is where I see it.

    Like many stock indices and currencies, Crude Light (CL) is at a critical stage.  It reached 114.83 after breaking out of a diamond pattern in April 2011, only to back test the diamond six months later at 74.95.  It then retraced .886 of that plunge, setting a lower high of 110.55 in February before plummeting once again as low as this morning’s 81.21 (the .886 is just below at 79.01.)

    CL now balances on a precipice, where a move in either direction is likely to be huge.  We’ll examine why, and which course is more likely.

    continued…

    (more…)

  • NYA Update – June 3, 2012

    The May 8 forecast for NYA was for the index to plunge from 7815 to 7340.  The forecast worked out well, as Friday’s low was 7286 (a quick 7% return, yay!)  As noted in that update, 7340 doesn’t really match up with any particular Fibonacci levels.  And, it doesn’t intersect with the rising wedge until early August (the highlighted oval.)

    I didn’t really see it taking that long to play out, and the market obliged for a change.  It also obliged by precisely tagging the fan line I had drawn off the Oct 2007 top (yellow, dashed) and one of the parallel horizontal channel lines (redrawn as red, dashed line E for emphasis.)

    We still haven’t landed exactly on a Fib level, so we either just overshot the .500 or haven’t yet reached the .618 target of  7145.  Deciding which it is presents some interesting questions.

    continued…

    (more…)

  • Why I’m Buying

    ORIGINAL POST: 10:05 AM

    I’m a bit surprised the Plunge Protection Team didn’t protect 1292 (but I imagine it means a Fed governor or the Bernank himself will be making an appearance sometime this morning.)

    I had set a mental stop level of 1295 yesterday, given the ongoing weakness in the euro and inability of the market to close positive on the day.  Two schools of thought going into the NFP release this morning: (1) that they would manipulate it upward, as usual, or; (2) that a brutally honest (hence, depressing) number would clear the decks for QE.

    I think the enormity of the miss (69,000 vs 150,000 expectations) clears the deck — and then some.  From a charting standpoint, it doesn’t hurt that we just completed a bullish Crab pattern at the bottom of a pretty convincing looking falling wedge with the SMA 200 just below current prices at 1284.56.  So, I not only lifted my remaining stops as the market fell this morning, I am buying more here at 1287.

    (more…)

  • SPX: The View from 30,000 Feet

    Our charts have grown fairly “busy” lately, what with harmonic patterns, chart patterns, fan lines, channels, etc.  I find it helpful every now and then to take a step back and examine those elements that have had the biggest impact in recent years — and are likely to continue doing so.

    In my opinion, the two patterns that have influenced prices more than any other are Fibonacci levels (primarily related to the 1576-666 decline) and fan lines.

    Note how strongly prices reacted to each of the Fib lines off the Mar 09 lows.  Every Fib level played an important role in providing support and/or resistance at pivotal points.  The .236 didn’t slow the advance much, but it provided much needed support after a 9% decline.  A tag of the .618 touched off a 17% correction (caught by the .382) and set the stage for the Gartley pattern completion at the .786 a year later.

    (more…)

  • A Most Lenticular Market

    Looking at the markets these past few days, I’m reminded of the prize that comes in a box of Cracker Jacks.  Not a real prize, mind you — but one of those cheap little pictures where the image changes as you shift the angle from which you’re viewing it.  It’s called a lenticular image.

    Despite the uncanny accuracy of our forecasts these past couple of months, the road ahead seems to shift a little with every fresh look.  I can’t remember the last time I agonized over a forecast for an entire three-day weekend.

    (more…)

  • Bet Your Bottom Dollar: Part Deux

    UPDATE:  10:30 AM

    Last night’s call on the dollar was timely.  Check out the candle on the daily chart — the completion of both a Bat and Butterfly pattern.

    EURUSD also seems to have put in a bottom, though as mentioned earlier it’s going to take ein Akt des Bundestages (literally) to save the euro now.

    ORIGINAL POST:  2:00 AM

    Back on April 30, I held my nose and plunged head-long into the dollar, also shorting the euro.  I’m pretty sure I invoked that age-old expression of confidence: “here goes nothing.” Hopefully, lots of pebblewriter members went along for the ride.

    In that night’s post [see: Bet Your Bottom Dollar] I put up the following chart:

    I immediately regretted sketching out the forecast in such detail; and, in fact, I caught a lot of guff from a few readers for so recklessly calling the bottom (you know who you are, wretched givers of guff!)

    I didn’t look at the chart for a few days, but knew things were going my way.  I just didn’t realize how well things were going my way…  Here’s the same exact chart two weeks later.

    It deserves a close up…if only to show how spooky a forecast it turned out to be.

    Throwing caution to the wind, I also posted the EURUSD chart below and wrote:

    Meanwhile, the EURUSD shows signs of finally breaking down.  Both the pair and the RSI action show a rising wedge that’s bumping up against a well-established channel.

    Note Point D — the completion of a Bat pattern — sitting down there all by its lonesome.

    It now looks like this:

    Yikes!  Harmonics don’t always work as well as they have this past month.  But, when they do, man is it fun!

    ************

    As far as the road ahead, EURUSD crossed a incredibly important fan line today.  It’s either fallen off a cliff, or it’s doing that roadrunner-running-in-mid-air thing.  On the other hand, it has completed a Bat pattern (as has DX) that should mean a reversal. The next 24 hours are critical.

    If I had to guess, the RSI leads me to believe we’re going to see a big bounce.  But, I’m taking my profits and sitting this one out.  If it plunges below the fan line, there’s plenty more downside where that came from.

    If it doesn’t, it’ll be because Merkel and Hollande are caught on video, breathlessly moaning “long live the troika” while mending post-election relations.

    Seriously, though, a stick save would almost certainly entail a commitment to all things Greek, Portugese, Spanish, Italian, etc. and more LTRO — lots and lots more LTRO.

    Stay tuned.

     *************

    For the last several weeks I’ve been double-posting pebblewriter.com stuff on the original blog and holding this open for former followers.  This website has been up for nearly a month now, and it’s time to start winding the other one down. [why?]
    If this blog is helpful to you, jump on the introductory prices while they last.  I’ve extended the 10% off discount for all new members through this Friday, the 18th.

     

     

  • New Charts!

    Lots of updates posted here tonight:  SPX, DJI, VIX, COMP, NYA, NDX, DX and EURUSD.   Summary charts here, or check the index tabs under the MARKET tab in the MENU.  I’ll have the rest of the indices and the metals posted later today.

    Each of these will typically be updated at least weekly, while I usually rely on SPX, VIX and DX to tell the day-to-day and intra-day story.

    In general, I’m seeing an almost identical pattern setting up in each of these RSI charts — and it’s bearish.  Unless this is a masterful fakeout, the next move should be down — possibly the result of PMI manufacturing or construction spending data due out at 10:00AM EST.

    Good luck to all.

  • 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 RSI action show a rising wedge that’s bumping up against a well-established channel.

     

  • 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.