Technical Damage

A continued drop in equities overnight now officially needs to be recognized as medium term technical damage. After a year of sideways churn and burn (i.e. most of 2015) it now seems that the floodgates have now opened. We are seeing significant moves across the board in equities, bonds, in the futures, and especially on the forex front driven by a strengthening Dollar. The exception being of course my old nemesis – EUR/USD which refuses to budge. Damn you Draghi!!

Going forward what once used to be a support line will most likely act as upside resistance. I have been pointing toward 1980 for weeks now and am actually pretty miffed that it was breached overnight. But that’s how it goes – you wait for an entry and it hits after hours during low participation. Part of the game.

Lo and behold the volume profile chart – this is pretty bad folks. Make no mistake – unless we reverse today and put a close > 1980 on the books the train has left the building here. The best we can hope for will be a last kiss goodbye (LKGB) revisit in a day or two.

Fortunately we did manage to grab a seat on the bond wagon. It’s come back down overnight but that wasn’t surprising really as it has touched its upper medium term resistance line. Although it might continue coiling up it’s pretty exciting having caught an entry here as I expect the eventual resolution to be a sight to behold.

No setups today – we are dealing with two groups of symbols right now: A bunch which are running like hell and a few which are stuck in place. The former need to complete the current move and there will be opportunities to jump in. I strongly advice against chasing the tape here – if you’re not exposed then don’t waste time wishing you were in a trade. Instead be glad you weren’t caught on the receiving end 😉

A few more goodies below the fold for my intrepid subs…

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