Key Markets Roll Call

We’ve got some counter moves across the board today and this is a good opportunity to take a snapshot of a few key markets. Equities are obviously in a corrective mood today but if this is the extend of it then we don’t have much to write home about:

We dropped all the way to the 100-hour SMA and thus far it’s been holding up (barely). Nothing really to report here until we drop below 1518 – if/once that happens then the daily NLSL at 1509.75 is the next level of defense.

Yesterday I wrote about the greenback and how it just had to retest that diagonal for a second time. I’m glad to see that it jumped back and is now scraping its upper 100-hour BB. However…

The long term panel shows us that it’s getting pretty close to its 100-month SMA and that will not be easy to cross.

Crude – that early morning long entry got stopped out not long after I posted it. It’s been a sea of red since and we’re now near the lower 25-day BB, plus there’s a daily NLSL offering additional support. If both give way then things may get pretty ugly here as crude may be forming a topping pattern. Great spot to get positioned either way – use that NLSL/Bollinger today. Tomorrow we’ll only have the Bollinger to work with as the NLSL will unfortunately have expired. FWIW – given that we’re seeing $5 gasoline in CA a drop here may be welcome news going into spring.

Gold update – I think this chart goes to show why the ability to sit and do nothing is what separates consistently profitable traders from one-hit-wonders. I did show you guys the LT picture on this sucker on several occasions and the odds of that playing out are continue to keep me in this trade.

Copper dropped through its 100-day SMA today without as much as a putting up a futz. Somebody wrote me the other day asking me if copper may be spearheading equities. I responded that it’s a possibility if we see a lot of weakness in here then maybe. If you’re a noob: there used to be a time (pre-Bernanke) when copper was leading equities and I was using it as a viable correlation. However in recent times this correlation has weakened and we can’t rely on it to point the way in equities anymore. Be this as it may – copper is looking weak and if you caught that SMA breach then I suggest you stay in until you’re told otherwise (e.g. a breach of the 25-hour SMA).

By the way, the weekly panel is also donning a 25-week SMA and weekly NLSL breach. If we don’t jump back it’s possible we drop back into 3.5 or lower.

Bonds – I have adjusted the diagonal on ZB a little to better accomodate the highs which now line up almost perfectly (so far so good). One observation that sprung to mind today was that counter trend moves seem to be getting weaker. However, I would be watching that 100-hour SMA for signs of a jump across that diagonal. If that happens I’ll flip for a long.

Soybeans hopped over the 100-day SMA – the weekly has us right below the 25-week SMA. I’d venture that a pop above 1500 would probably drive us higher – a drop below 1440 should lead us lower.

EUR/USD got quite a bit uglier since I took this snapshot half an hour ago. We are now just a few pips from that weekly NLSL and the monthly has us below both, the 25-m and 100-m SMAs. I hope it keeps this up 🙂

Cable – I’m showing you the weekly and the monthly. Boy, things really got ugly there and it’s now crossing below its lower 25-month BB. Quite frankly I don’t see much in terms of technical support here. The lower 100-week BB may be good for some I would not jump into the fray here until I see some level of buying interest. Never under estimate ongoing trends in commodities and currencies – once things get going they can maintain their momentum way beyond many trader’s expectations (and solvency).

Cheers,