Weekly Review

It’s summer holiday season and most of you guys probably have better things to do than to stare at Mole’s charts. However, I do have a few LT goodies worth sharing with my hardcore crew, so let’s jump right in:

As noted last week – the spoos stepped all the way up the abyss, took a good look, and then chickened out and leaped backwards. It was rather fortuitous to have our weekly support line up with the monthly and my subs hopefully got positioned accordingly. Technically that was (and continues to be) a great line in the sand which as of this writing remains unbroken.

The configuration on the spoos I pointed out is not resembling an inverse H&S pattern anymore. However there is clear resistance looming at 1390 which also lines up nicely with our P&F chart. Take a look:
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As you recall – that is our original bullish price objective. Which btw was never reversed as support held where it was needed. Keep in mind that diminishing fair value will affect the delta between the spoos and the SPX. But by the time we get to 1390 (assuming of course we push higher – not guaranteed by any means) we may be close enough to the quarterly contract expiration.

You may recall this chart – I pull it out of my war chest every once in a while. The ratio between NYSE stocks trading above their 50-day and 200-day SMA has been pushing up hard in the past few weeks ever since that divergence right at the bottom. Looks pretty supportive and we seem to still have a bit space to go.

A quick peek for on the daily spoos – my only short term chart today. I’m posting it here as I wanted to keep it for my intrepid subs. That was quite a jump from Thursday’s low – a whopping 30 handles! And it closed us right above a daily NLBL – which is a technical buy. Well – theoretically of course – after a big candle like that I always expect a bit of a shake out attempt or at least a sideways test-the-weak-hands session.

Euro as represented by the FXE – as you can see we are getting pretty close to our bearish price objective. So if you are short the EUR then you may want to start reducing your exposure.

While we’re on the subject: EUR/CAD triggered a monthly inside sell signal and we are now below both my LT Bollingers.

Even the hourly and daily panels look sold to the max. I’m not saying that a long squeeze cannot go on for a bit longer but at some point we’re going to run out of selling pressure and dip buyers may become interested. The EUR has been hated long enough – as much as it pains me to say that (obviously I enjoy the current EUR/USD FX rate). Anyway, I am now looking for some signs of a bottom – an inside candle, a Retest Variation Buy, a NLBL breach admittedly still quite far away – something. Will keep you guys posted of course if something interesting transpires.

And then there’s silver – oh so close to its own abyss but thus far it’s been holding. A good buy right now with little risk – especially since the current bearish PO has already been met. Of course if it drops below 26.5 then all bets are off – or actually all short bets are on! 😉

Cheers,