Up Up And Away!

Superbernie’s timing when announcing eternal ZIRP late last week was rather exquisite as ole’ bucky was hanging in the balance and we were sitting at respective inflection point on a number of FX pairs.

Of course on the receiving end of the Fed’s equation, as usual, was the U.S. Dollar. Which I hate to say is starting to incur quite a bit of technical damage at this point (as you know I live in the U.S. and that’s what it’s in my wallet after all):

If you are a sub and have seen my pertinent P&F chart then you probably realize that this innocuous looking breach may have major implications. The Dollar has been in a technical uptrend and a breach of the 78.9 mark is bound to reverse the bullish price objective on the books thus far. I’ll check the P&F after the market closes and let you know. But in any case, even the time based chart above shows nothing but air below with a 25-day 2.0 BB that’s now dropping to the downside – fast.

Here’s another chart I have presented to my subs on several occasions. Over the past few weeks I started to see a very bullish formation on my NYSE A/D ratio panel. I compared it with a very similar one I observed back in 2011 which accompanied a merciless short squeeze that prolonged heavily overbought conditions. And once again like clockwork we have bounced at that very same support line. As I said this weekend – this chart should make the bears very very nervous.

On to the FX side which is starting to look very profitable – subs will recognize many of the setups I posted over the past week. The EUR/CHF just lifted above some considerable resistance and although I do expect a little retest this is the break out we’ve been waiting for. If we do get a retest of that 25-day SMA I would load up on additional long positions. Low risk setup here as we can put our stops just a few pips below that one. But bear in mind that SMA is falling, so be out if we close below that NLBL at 1.2085.

Quite a few more FX and commodities setups below – please step into my badly decorated lair:

USD/JPY is also making a run for it and has breached significant resistance – similar setup and similar considerations if you are trying to catch this one late.

Strike one on the EUR/JPY – it has not breached through its upper 25-day BB or the 100-day SMA just yet but the way it’s going we may see that happen soon. Keep an eye on that setup – if you missed that first push up then be long on a retest of that 101.57 NLBL with minimal risk when placing your stop below it. By the way – are you starting to see a theme here? 😉

Inverse situation on the USD/CAD – very bearish looking chart as we are dropping away from our current NLBL and both BBs are starting to droop lower.

EUR/AUD is still in the process of deciding which way it’ll go. However the 25-day BB bubble is contracting and we are now in a compressing range. Which means we’ll probably get a decisive move to one direction in the near future. Not an easy trade as there’s a lot of resistance looming above but if it breaches it should result in one monster move.

Okay enough on the FX side – let’s move on to commodities. Copper keeps knocking on its daily NLBL at 3.894 (sorry for that comma on that chart – Euro habit). IF there’s a breach above it’ll most likely follow its 25-day BB higher.

Coffee futures – it’s been a while but our favorite hot beverage is once again starting to look interesting. A breach of 221.66 is what I’m looking for which would put us above that daily NLBL and clear the way to 229.5.

If you don’t like your coffee black then it may be time to add some sugar. Actually a very similar setup, except that we’re near a dropping 100-day SMA that thus far has proven to be a Chinese Wall. If we can sneak above it (i.e. 24.69) then I think we’re going all the way to 27. Of course a failure here would be an opportunity for a short trade into 23.5 – not as exciting but as stainless steel rats we nibble on what we can get.

And last but not least – it’s bonds again. We are back at what is now a sideways moving 100-day SMA. And based on prior precedence this is a good long trade UNTIL we breach 140’30. Which you know is what I really want to happen. Doesn’t mean I’m gonna get it of course, so I try to weigh the odds here carefully.

This is what I call my Chris Carolan chart – well, it’s mine but I’m sure Chris is carefully watching the long term situation on the bonds side. A breach here (again, IF we get it) would have significant implications as it would represent technical damage and an official breach of the current LT bullish trend.

More subtle but also noteworthy: If we push higher again then we may just get ourselves an inside candle on the monthly chart. The preceding candle is rather long but so is the current one. And that would be a great LT setup if we wind up breaching this month’s lows later in March. Yes, yes – one can dream… I’m a man of simple pleasures.
[/amprotect] Cheers,