Thursday, May 27, 2010

I'm Back

Thanks for all the e-mails and messages, I had some other stuff to take care of.
So where are we in the markets ....

This is a long holiday weekend in the US and the UK (Monday) and normally going into a holiday weekend the market reverses its prior trend and then following the week it should resume it again.  The trend of late has been down so I would expect to rally into the holiday but Thursdays are usually the biggest down days of the week and I therefore think we go down today and possibly end the week with a face-ripping rally.  Which all makes it pretty dangerous out there!!  I might not trade very much until next Tuesday.

So what looks good.
Euro is weak vs everything.
You can draw a pretty good wedge of EURGBP on the daily and a break of yesterdays low is a break of the wedge and says we have much more downside.
EURAUD is a good short on its way to at least 1.45 but I think the breakout level of 1.42 is possible.  EURCAD is dropping like a stone also, next key support is at 1.28

Gold fell from the highs, and has bounced up to the 61.8 retracement at around 1218.  I think it is a pretty good short here although slightly higher risk.  Waiting for a daily reversal candle might be better or a break of this 4hr trendline.

Crude is rallying I think on the hope that the fix in the Gulf will stop the leak.  Crude is pretty overbought and I think from here it rallies to test the 75.00 level and the underside of the channel it broke out from but I think a rally has the potential to take us to $80.  Any bad news from the Gulf will not help crude longs so I am watching the news closely.

In summary, we look likely to get a big risk reversal into the holiday weekend and EUR is not the best buy right now.
I like long AUDUSD to 87.00

and short USDCAD to target 1.03 - 1.025

Finally ... USD prelim GDP and employment numbers could be a market mover, out at 08:30 NY time


  1. welcome back, low in oil coincided with an attack on a yemeni oil pipeline....haha yes i know tinfoil hat n all that

  2. Haha I saw that pipeline news. You must be used to your tinfoil hat by now ;)

  3. well at least we know where the line in the sand is now, kinda what i was waiting for. Some interesting things have come out of Greece as well, first there was talk that they may go to market to try and sell some short term t-bills and yesterdays piece that they were trying to renegotiate with the EU and IMF over pensions..... certainly something aint right there.

  4. This stuff about China dumping eurozone debt / bonds is not good at all ... and Libor affects the US a lot too.

    I am sticking by down then up to end the week but its volatile out there!

  5. Ouch. Still a lot of first time unemployment claims and GDP not all it was expected to be. QE part 2 will be coming soon ...

  6. agree with you lookin fr s+p down into 1065 then a bounce similar to crude looking for it to make a move above the hrly 300 ema then sell a failure tgting 300 lwma first