Escape From Siberia
So here I was at Orly – shivering in my seat and incredulously watching some death defying ground support team hose the wings of our plane with hot water in order to blast off of all the ice. Which by the way accumulated in a matter of 30 minutes as it was pouring down snow like in a Siberian gulag. I have flown planes myself in the past – small ones, like Pipers and Cessnas. So I’m aware that it’s not the snow that’ll get you – it’s the iced up up wings. And quite frankly I do enjoy flying and have been through my share of bad weather. But I’d be lying if I said that I wasn’t thinking whether it may be best to catch another flight there yesterday.
In the end we all made it to Valencia safe and sound. And what a difference 800 miles can make! I get out of the plane around 1:00am in the morning and it must have been around 50 Fahrenheit (ca. 10 Celsius). Today during the afternoon temperatures climbed up to 18 Celsius (approx. 65) and this weekend it’s supposed to turn 23 (~73 F). Suffice to say I’ll be enjoying every minute of it.
I’m happy to report that I’m actually feeling pretty well today – after consuming copious amounts of Oscillococcinum and fluids I think I may have actually made it out of the Gallic winter hellhole without either catching a flu or a cold. I guess it may be time to pick a religion…
Let’s get to the tape. The spoos are in shake out mode and I hope you haven’t gotten caught in the middle of today’s gyrations – it’s been running like a hare! Yes volatility is at rock bottom and yes the volume profile map is suggesting a ceiling. BUT that doesn’t mean the bears are going to take over the steering wheel here. Especially if everyone thinks it’s going to happen.
Always remember – what everyone knows isn’t worth knowing. Let’s look at the facts here – despite plenty of volume until 1148 we turned near 1459 this morning. Which by the way was a very productive candle from a technical perspective as it now presents us with a triple tested diagonal support line. And that means going forward we have some technical support to hang our hats on. As long as this diagonal remains intact the ongoing trend should do the same.
I guess you know about AAPL taking a nose dive and I’m sure you recall that I mentioned to watch it as our proverbial canary in the coal mine. Now, the 500 mark has been taken out and that’s worrisome. But we do now have quite some sturdy LT support waiting below – just so happens that the 100-week and 25-month SMAs line up near 475. So I say let’s give that support zone a chance and if we breach it then we have further confirmation that this rally in equities may be running on long in the tooth.
Before we get to the setups some musings on the Dollar (my problem child). As you can see the DX has been approaching its lower LT support line. There’s also the 25-month SMA right below and I think that 78.5ish will be an important inflection point for the old greenback.
If that gives then I think the bearish PO on our P&F chart would be almost but certain. Not a great prospect for this expat living in Europe.
Bonds – the 10-year is at its own diagonal and I want to be short here before I want to be long (you know the drill). YOu can use the 25-hour SMA for more fine tuning. So far it’s been supportive but I expect resistance to kick in here quickly. If it doesn’t then I probably want to be long with a stop below the 25-h.
AUD/JPY – we have quite a number of FX setups tonight. I think that daily NLSL breach is hard to pass up. I’m short right now with a stop above both hourly SMAs. Long if we bust back above the daily NLSL. Simple.
Facebook – now actually breaching below its 100-hour. And that means I’m short with a stop above. If we recover then I’ll jump into a long position.
Walmart has been pushing sideways recently and I’m sensing some indecision here. On the daily panel it’s about to collide with its 25-day SMA. Which means I will be short as soon as I see a breach of that 100-hour SMA.
Maco-do-nardo – no kidding, that’s how they say it in Japan: It already tested its daily NLSL and I’m long with a stop below the 100-hour. Not a complicated setup. I may get short if we see a breach.
INTC – long on recovery of the 25-hour. I like the context here and would love to catch a ride on the 100-day breach bus. If we decides to stop by that is.
BAC – long if it pops back above the 25-hour SMA. Which would mean we are in a 25-day SMA bounce setup.
USD/JPY – it’s recovered a bit since this snapshot and I want to be long if it makes it above both ST SMAs.
USD/CHF about to run into daily resistance. I think the setup is clear.
Cable on the fence – I’m currently short with a stop above the 25-hour.
EUR/JPY – sitting at ST support – I’m long with a stop below.
CAD/JPY – I’m still short but think this may turn into a long if we pop above the 100-hour. Also a recovery of the daily NLSL would be my signal to get out and flip it for a long.