Another quick Wednesday night post, as it is late and I just got home. Things went about as expected today, a little stronger move up than I anticipated, but not out of line. Trend lines held, but it looks like the eur/usd is weakening again. Let’s look:
The trend line was breached, but only shortly. Volume was not too impressive, and I expected this line would offer some support, but I do believe it will give way on a big down move day with some v.
The SPX is very similar, breaching this once breached support line before closing above it. I don’t view this one as strong as the DOW trend line, and I could see it easily giving way.
The UUP managed to close above the 22.50 support, although it did dip its toes in the water below. I imagine this level will offer decent support. Today was the lowest v in the last four days, the only down day of those four day, by nearly 50%.
I think this was the catalyst for the UUP move. Support held, but it looks like it is giving way, slowly as expected. Once the dam is broke, I think we will see a pretty decent down move. The one caution sign is that the RSI is moving into the oversold range, and is at the lowest levels since May, where this current rally started.
In closing: We have some real data coming out tomorrow. After the last jobs number, my guess is the mkt. is counting on a much bte initial claims number due to the awesome jobs number. If the number disappoints, this could certainly be the catalyst for a down move. If it is a lot lower than the 455,000 expected, we could see a pretty decent pop. The fact that the number comes out before the open, will help initially to stabilize the mkts. move. News set aside, I would expect a day ( as in today) to three days of small up or sideways movement followed by a big down move to break the trend line. That’s it for tonight folks, many more charts tomorrow. Trade well and prosper. AKOT
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