Daily Archives: July 9, 2010

Bonds Dropping Towards Support (by Springheel Jack)

By -

I posted a rectangle on the 30yr Treasuries 60min chart yesterday and
that broke downwards yesterday morning. It has since almost played out
to the downside target at 26 and is not far above key rising trendline
support slightly over 25:

100709_30YrT_60min_Rectangle

Here's the daily chart showing the strong support trendline as the lower
trendline of a rising wedge. A break of this trendline would be a major
warning signal that the bear case for the summer was in real trouble so
I'm watching this one very carefully:

100709_30YrT_Daily_Rising_Wedge

For EURUSD I've mentioned before that I have a target of 1.28 that
must not be broken for the bear case. In the very short term though the
action in recent days has resolved into a nice looking rising wedge with
a target at 1.248. I'm thinking that a break of the lower trendline
will signal a more significant retracement than the one we saw
yesterday. As I've been writing this the lower trendline has been tested
and bounced hard:

100709_EURUSD_60min_Rising_Wedge

On ES I have a sort of rising channel, inasmuch as I have parallel
support and resistance trendlines, but I'm doubtful about seeing a
return to the lower trendline in the near future. I am thinking that
we'll see some retracement soon though. My preferred ES target is at
1084. but not until next Wednesday so we would need to see at least some
retracement first. My ES target is as high as 1096 ES if hit today:

100709_ES_60min_Rising_Channel

I was reading a lot about Atilla yesterday, and his call
last week to go long at 1018 ES was nice work. My calls on Thursday last
week for an imminent or interim bottom at 1000 or 990 ES, and the next
day for a return to the 1070-1090 area, were also very nicely timed, but
the hero of the hour, for my money, is Pug of Pug Stock Market Analysis, who
called the day and the level of the low better than anyone else I saw.
He has been on fire this week calling the waves up as well.  Pug's one
of the analysts I read most days & though he has a subscription
service, he publishes his main daily market commentary for free and it
is always well worth reading IMO.

Pug's immediate target for this move up is 1085 SPX, which is very close
to my best looking target level as well.

I'm very busy offline today & may well not get a chance to check in later. Everyone have a great weekend!