Wednesday, May 25, 2011

Dollar Index (DX) Possible Trend Change 5/25

The dollar index has been comfortably trending upwards for the last couple weeks, but after a couple straight down sessions, tonights Asian session has started off with a sharp loss for the dollar. It looks like its best chance of finding support will be in the 75.64 area where there was previous peaks made on last Wednesday and Thursday along with its 62% retracement from its last up move. A slip further than that and we could see the dollar start heading back south, sending just about every other market back on its way up.

Crude Oil (CL) End of Day Report 5/25

I said in an earlier post this was gonna be the day to see where crude was headed, and it looks like it might have decided its to the upside. I still hold out some hope after seeing multiple shooting star candles being formed off the previous peak @ 101.45 that this may be headed downwards, however I feel much less certain. Again, if you've held on to a short this long, I don't think there is any reason to dump till we see it break into the 102 area, but be ready to pull the trigger. At this point though, if you have been looking to get long oil, this might just be that opportunity, especially if we get any downward movement to the 100-99.5 area during tomorrows session.

Euro End of Day report 5/25

I suggested in an earlier post that there might of been an opportunity to sell the euro on its retest of the 1.41 level, and it looks like you might of been able to be slightly profitable on that trade, but the pairs direction is starting to look muddled at the close. While were still under 1.41-1.4125 area, which lines up with the purple retracement and the yellow support / resistance line, it looks as though were forming an upward sloping trend line to the south. Usually this type of formation indicates an eventual breakout to the flat side of the triangle. I think there is still more money and less risk to the short side, but I'm not touching this.

Nasdaq Mini Future End Of Day Macro Charts 5/25

Yesterday, I said the 2320 level would be significant resistance. Today's short covering melt up in the afternoon stalled in the very same area and came off it pretty good. I was scared a little bit watching my shorts get hammered today, especially when I added to them at 2307, but the last hour of the session calmed me down. Looking at it now, today was a proverbial dead cat bounce. Sell the pops, Nasdaq is headed to at least it's previous support of 2280, and most likely lower, to the bottom of the bearish magenta channel. If the Nasdaq can close back into the old bullish channels above it (blue and light blue) I will change my tune. Until then... STFP (sell the fucking pop)

SnP Mini Future End Of Day Macro Charts 5/25

Wow.... what a session. After a complete meltdown during the Asian hrs, we retraced it all the way and ended up pushing new highs for much of the day. High of the day stalled at the 50% retrace (1325) from the highs of May 19th, to the lows of today. This is also the 38% from the Japan lows to the May 2nd highs which was good support, and is now resistance.

As long as we don't penetrate today's high, I still feel rallies can be sold for an eventual test of the 1290-1300 support area. Any close over 1325 and all bets are off.....

Crude Oil (CL)'s big decision finally upon us 5/25

It looks like crude oil is finally gonna make up its mind today, and for a while now I thought surely it would be to the downside. I think how this day finishes and tomorrow's overnight session will determine which way we go. I feel that if this break of the trendline in yellow holds to the upside, we have a good shot of going higher and staying in the low 100's (I still wouldn't be convinced of us going to new yearly highs). This said, it would not be the first time intra-day I've seen a false breakout one way only to eat up stops placed and end up in a giant shooting star and head back for where you thought it was going. If you're still short and have the capital to hold through this heat, I would wait the day out. I believe oil is who I thought it was to begin with and this will be a fakeout, but I sure as hell wouldn't think that if we close here.

Silver (SI) uptrend restarting? 5/25

After the big commodity meltdown earlier in may, it looks like silver might be ready to start its trend back up. It looks like it held some support found at the 34 level from both a retracement and a previous base built up in mid march. It now looks to get out of that channel its forming as it goes for its second strong day in a row. There is some good continuation divergence seen between the two low points in the MACD over the last few months, and there seems to be no reason to think this wont regain most of its losses from early may.

Euro midday report 5/25

The euro showed some strength overnight and this morning by rejecting its dip lower, but still holds its peaks from yesterday and while I might not bet the farm on it, it looks like it has given a low risk opportunity to get on the short side of this trade. Look for a definate crack of the 1.410-1.415 level to signal that we might be headed up for a bit.

Russell 2000 Index (TF) Intraday 5/25 10:45 AM CST

 So after an almost breakout overnight in the Asian session, we are seeing a hard pullback in all equities, and if you've been short you might start to panic, but I think its a little premature. If we look at the daily chart we are still in our downward channel, and while it would be a great close to finish under the yellow support line at 813, I don't feel its imperative to do so. Going more in-depth into the hourly chart we see that we have been doing this a lot, and actually got some normal divergence to see this uptrend coming, but we are at this moment still within the retracements of this latest down move. As long as we stay roughly in this channel and inside the 62% retracement (@ 824.3) than I think all is still well in shortland. Rome wasn't built in a day and certainly strong psychological supports like 800 weren't broken in a day either. Don't panic, and if you're bold this might just be a chance to STFP.

EURUSD Morning Update 5/25 8:06AM

This last half hr bar (7:30-8:00) was important. Supply came in when the market hit the 1.4080 resistance and put a ceiling in and a recent 30 min bar double top. Look at the volume. That was a statement. Already the beginning of the 8:00 bar looks weak.

I am looking for 1.40 today

Nasdaq Morning Update 5/25 8:02AM CST

After the Nasdaq took a mystery pounding over the Asian session, we got back as high as 50% of the pre selloff levels.

Look at the volumes (bottom white bars)
Supply entered the market in force and crushed it to the lows.
We have retraced that 50% with no real conviction of buys or sells.

I think the lack of buying volume at the end of that selling spree is bearish.
Combine that with a nice shooting star right off the 50% line on the half hr chart and I think this rally can be sold.
However, be a bit cautious, as I feel we might have one more buying climax (possibly stalling at 2307.5) before we head lower.

As always watch the volumes.... If we get increased volume when we get near the 50% or 61.8% lines and they are bearish candles (shooting star/ engulfer/ etc) get ready to start selling