Tuesday, June 7, 2011
In the previous post I had said it looked like this was ready for a short opportunity, of course not listening to my own advice I said its probably best though to wait for a confirming candlestick signal for your entry, and this is what I get for that. We see the euro has risen almost a full cent overnight, but were seeing more divergence forming again, and while it might not be done, the longer it diverges usually the faster and more dramatic the resultant move ends up being. With no real news today and Bernake set to speak in the afternoon, I could see it being more than possible that what happens off him blabbing might decide if we see a signal this afternoon or not.
(shown on a daily chart in my previous post) We also see continuation divergence between price and the MACD in both charts shown by the yellow trend lines. I think these levels are important to stop at if these markets are to continue down right now, otherwise a retrace of last weeks sell off might be in order.
(Chart 1 - Crude oil daily chart zoomed)
(Chart 2 - Crude oil daily chart)
Having rejected 100 yesterday and sold hard into and just through the light blue up channel, we have the high of the current session at just under this light blue channel line.
This line will now be ultimate resistance for crude shorts
any close back into this channel and the shorts need to cover I would say.
I would target 95.50
(Note: I am looking to add to my current short crude exposure if it rallys at all near this 99-100 level today)