Monday, May 23, 2011

USD/CHF to resume downtrend 5/23 8:15 PM CST

It looks like the swissy might be resuming its strength against the US Dollar as we bump into the bottom of the most recent retracement and a reverse in polarity on the previous support (@.89 in purple). Looks like a good play to the short side with a break above the most recent peak (@.895) being a the signal to get out of any short for the time being. There is also some divergence indicating this trend is continuing as the MACD is just slightly higher now than it was at its previous peak (highlighted by the yellow trend lines).

Short Term Bullish Case for Crude? 7:35PM CST 5/23

I agree with the previous post that the risk to Crude over the intermediate term is to the downside. However, I present a short term scalp with a decent risk/reward.
Buy Crude on a pullback to near the bottom of the purple channel. Place stop at 94.00 or exit if it closes under 95.50 on a daily basis. Take half off at 98.95 and rest off at 101.45.

Strong support from purple bull channel as well as midpoint of current major bull channel (yellow) and 100 day VWAP (97.32)

I think it will delay the coming bigger, broader selloff, and it will attract buying into the 100-102 area

Crude Oil CL - Possible Downside Breakout 5/23 7:15 PM CST

Crude oil made a dramatic sell off earlier (5/2-5/5) and since then it has been coasting along in what looks like a descending triangle (Pennant, flag, etc...). It looks like maybe it will finally come to an end soon as it bounces between the resistance and support outlined in yellow in the charts. A descending triangle preceded by a sell off would usually be an indication that the eventual breakout would be to the downside, and thats where my bets would lie too. I think this might come as early as the European session, but could drag on another couple days. I think personally a good entry might be tonight to try to sell any pop into the 98-100$ / barrel range and look for it to crack the support at 96-94$ / barrel. If it does, look out below, cause I don't see any support coming up, and it looks like the 100% extension of the recent sell off, shown in purple, lines up with the next low (@83.80).

Russell 2000 Mini Future End Of Day Macro Charts 5/23

The bearish channel (magenta) is in control. Short term, the Fibonacci cluster at 8060-8100, as well as the 100 day VWAP (yellow) at 8135, should provide good support and prevent price from reaching the lows of the channel. A test of the channel midpoint should be the first test of if this thesis is valid. Should the midpoint provide meaningful resistance, I will be more inclined to discount the 8100 support and look for a test of the lows of the channel near 8000.

Nasdaq Mini Future End Of Day Macro Charts 5/23

This coming session for the Nasdaq is going to be very important. Today we closed right on a
cluster of very important technical levels:
-Downside breakout of bearish channel (magenta) target (2315)
-Low of current bull channel (yellow) (2318)
-Deep fibo retrace of April low to the highs (2318)
-100 day VWAP (yellow) (2321)

It is tough to call at this point. Call it a hunch, I say we go a bit higher here and stall at the resistance at 2335-2340. I think the low of the old bullish channel (cyan/light blue),the low of the old bearish channel (magenta), and the Fibonacci cluster at 2336-2339 will be significant resistance should they be tested on a not too distant rally

SnP Mini Future End Of Day Macro Charts 5/23

After a very bearish 2 sessions, I think 1290-1310 will prove quite strong in standing in the way of an "oh shit" selloff of a week. I think we could go a bit lower tomorrow, but any lower will bring out buyers with strong support looming in the form of:

-all kinds of important Fibo levels between 1295-1310
-100 day VWAP (volume weighted avg price (yellow moving avg on the chart))
- Low of current bearish channel (magenta)
-Low of current bullish channel (yellow)

I am looking for a retest of 1325-1335 to sell into, but if you are one who likes to BTFD (buy the fucking dip), I think the support I cited will be strong

Equity Wrapup 5/23 3:30 PM CST

After we saw a large slip in the equities market in the Asian and European sessions last night, we see not much activity today as some major supports were broken in both the ES and TF markets. Both tested these levels during the US session but failed to hold any ground. Most of the equity indexes have been forming a downward channel since their yearly peaks, and for atleast the TF we see it reaching major support highlighted with the yellow line on the daily chart. It feels as though there will be a couple options overnight, either we just break this support and pop back up, maybe having a couple day rally back to the tops of these channels or these markets make a statement tonight and tomorrow with a strong down day. I've personally peeled half of my short position (mostly puts on bull etfs) and will wait to see how these next few days go.

EURUSD Future (EU6) Daily Chart 5/23 12:15PM CST

Having gone on a 2 day free fall reminiscent of the first half of 2010, the Euro now is flirting with the 1.39 level, which should provide significant support (middle of current bullish channel, 100 day VWAP (yellow), 50% of YTD rally)

A further breakdown from here could look to test 1.3550 level

Natural Gas (NG) Daily 5/23 11:10 AM CST

It looks like Natural Gas has confirmed the engulfing pattern seen on Friday (5/20). I love this setup when we just break support (@ 4.15) one day and the next engulf back up through it. Both Thursday and Friday were relatively high volume days too just to confirm this was no market BS. You can also see the positive divergence shown from the two low points with the MACD, usually a good indication of a continuing trend. I would look for this to eventually make a new high, and will be looking to enter if there is any pullback today or tomorrow.

Russell 2000 Index (TF) Daily 5/23 10:00 AM CST

It looks like we are on the Russell's last chance at some support here around the 812 level. If you had been in short from the divergence formed between the 4/6 and 5/2 peaks, than its a good time to pull some off here just in case. I think eventually we will head down to the 770 level where we see previous strong support and the 161.8% extension level. Big test for it today and next few days here first though.

SnP Mini Future Daily Chart 5/23 10:00AM CST

Volume Weighted Moving Avgs (VWAP)
Red - 20 Day
Blue - 50 Day
Yellow - 100 Day

Having Broken Down off of the 20 Day VWAP and the top of the most recent bearish channel (magenta), and today having firmly gotten through 1320-1325 area, should we stay under the 50 day VWAP at 1316.75, I would look to see it test 1308-1310 (100 day VWAP and 50% from March "Japan" lows to May 2nd High).

Should it fall further, 1290-1300 will provide good support (low of bearish channel, deep fib retrace (61.8%) of japan low to may high, and shallow fib retrace (38.2%) of Nov 2010 lows to May 2nd High)

WTI Crude Daily Chart 5/23 9:30 AM CST

WTI Crude at good support here
Lower from here looks to test current channel lows at 91.50
Higher could see short term test of 100 with an ultimate test of the channel highs at 102.50