Bank of Montreal yesterday told their clients to get out of equities and "Go To Cash - In Plain English".
Last week this was the cover of Newsweek:
However my favourite contrarion signal is GS lowering it's target for EURUSD today to 1.15 for clients. (I am pretty sure that it will go there eventually and lower but they got EUR wrong twice and three times is a charm.)
Bearish sentiment is now at an 11 month extreme.
So we could a little uber-bearish and due a risk bounce.
I am not suggesting that we are starting a new bull run or that anyone should buy euro's but there is a possibility of a bounce and a new place to sell more ...
I posted last month about the S&P and I think the 1038 low of 25 May has become one of those key line in the sand levels. Wednesday's candle and close is bearish and if the 1038 low does not hold then supports are at 1000, 981 and 952 and we will likely hit them very sharpish if that 1038 breaks. But while we hold above 1038 with no follow through I am looking for a rally to 1122 or 1150 to sell again but we have to break kryptonite fib retracement levels at 1075 and 1083 to get there.
AUDUSD has bounced off a key SR level and pivot from 1995
If the descending trend line breaks I am looking for a rally to 0.86 or 0.873 to short again.
FX options indicate that AUDUSD might be set to rise also and AUDJPY looks to have put in a base around 72.00 and I am looking for a rise back up to 80.00
Cable is in a pretty clear descending channel, three waves down, and has bounced off the bottom put in a lower high and today's daily candle is a bullish engulfing. I like this long to at least 1.49 / 1.50 but 1.52 is a better level to look for shorts again.
Thursday is the Bank of England rate decision ... no change in policy expected for now.
CRUDE: 4hr chart
Crude looks to have put in a bottom and broken trendline resistance. I am looking to buy dips for a counter-trend rally back to 78.00 or 79.50. In the event of a good short squeeze 81.00 is not ridiculous.
Dollar Index. The dollar index broke its double top / bull flag. It has now rallied for 6 straight months and it has never rallied for 7 months in its 39 year history. I am a big time dollar bull but this month may be a month for a correction for the dollar. Check this chart from Bespoke Investments.
PS - I was going to say I think Gold could be putting in a double top but I won't mention it because everyone loves Gold except me.
My positions tonight:
AUDJPY long 75.50 stop 74.90 PT 78.00
GBPAUD short 1.7440 stop 1.7480 PT 1.7250 (break of daily IB and trendline support)
CRUDE long 75.00 stop 74.50 PT 78.00
This pair is inversely correlated with stocks