Over the past few months a potent emotional cocktail of fear and confusion has been seeping into the consciousness of market participants. It’s not just that equities are steadily heading lower whilst producing more and more bearish context above to be overcome sometime in the future. What’s worse is that there appear to be very few places remaining to sit out the storm. The exception of course being the two usual suspects – bonds and gold. (more…)
I’ll make this quick, since the ol’ laptop is almost out of juice anyway. I’ve been watching with fascination what’s been going on with the Yen tonight. My stomach was in knots as Kuroda’s time approached, and I groaned to watch the USD/JPY roar higher and drag the ES along with it, ripping it around 22 points higher. Even the NQ, which had been deeply red thanks to Amazon exploded into the green. I was bracing myself for a rough Friday.
Well, who knows what I’ll be looking at when I wake up Friday morning, but for now, I’m a little less worried than before.
As I type this (and it hasn’t even been an hour since the news of NEGATIVE interest rates in Japan broke), almost the entire ES rally is gone, and the Nikkei went from the 18,000s to the 16,000s within the span of minutes. This is the kind of mayhem that Central Banker government bureaucrats can inflict on the “market.”
I’m not resting easy yet, but there’s hope. See you in the morning. (Late Nite Update: I can see the ES and NQ have bounced once again well into the green, following the USD/JPY. Friday should be interesting, to say the least.)
Apologies for the very late post today. I had a morning appointment that overran badly, and it’s slower work getting charts done after the markets open and I’m then trading as well as charting.
I mentioned on twitter last night after the close that the bulls narrowly managed to avoid a 5dma three day rule breakdown with a target at a retest of the lows. There was more downside overnight that reached my ideal target on ES at a retest of the 1850 area and ES then reversed back up hard there. There is a strange myth that globex highs and lows always need to be retested soon after. I’ve been watching that for a while and have seen little evidence to support this, and there’s no need to see that here.
One signal that Crude Oil could be putting in a significant low is being flashed by the Canadian Dollar, which has reversed from its plunge versus the Dollar.
Let’s notice on the lower chart that USD/CAD rocketed through its upper-channel boundary line one week ago, followed-through to the upside as Oil plunged beneath $30, but has reversed sharply (USD/CAD) from nearly 1.47 to 1.42 (CAD has strengthened)– and has pressed back inside of the upper-channel line… suggesting that Oil could be poised for a pop to $30-$31 in the upcoming hours.