Wednesday, November 11, 2009

Minis, Dollar, EUR And The Wedges

Interesting day as both the dollar and markets are up today on what appears should have been a healthy breakdown according to the trendlines. Maybe the PPT or the HFT bots saw it coming and intervened. The action is just screwy IMO.I should have titled this the sick possibility of more upside (wait till you get to the daily chart - ugh).

$DXY 60m - Broke to new lows and pops up to take out what I believe is a solid tendline. This one is a moving target and I could have the upper and lower trendline in different places, but this makes the most sense to me. The DAILY $DXY has a solid divergence in RSI to price and S Sto looks like it may want to help push up. This is the chart you can trust the least IMO.74.50 baby - if it stops and holds there, my nightmare below will not come true.

E- Mini 60m - OK, so this puppy broke down thru the lower trendline of the rising wedge. Ya'd think the two breakouts together would mean something. The moves actually correlate very well (except for the dollars action in pre-markets  which is why we had the up and down moves this morning in rapid fashion). Something to note is the DAILY e-mini RSI is at its divergence trendline at 69 with Sto topping.

EUR/USD weekly - This chart is a little hard to read as it is a chopped up version of a 10 year chart. One thing is clear - the rising wedge and the horribly overbought weekly indicators. That pink line is a trendline that was market support going back to 2003. Nice resistance on the backtest I say. The fibs are off of the lows in '02. Looks like a divergence in RSI is being set, thus breakdown soon. EUR/JPY is boring and in a ascending triangle inside a rising channel with a bad looking RSI divergence to price. 

Daily SPX - now to the meat of the story -THE RETURN OF THE DAILY INDICATOR CHART (yeaaaaaaa!) that is still under construction. OK - lots to cover here. Kind of cool to see the upper bear market trendline (black) right above with divergences all over the map on a daily chart below. The gap from 1107 to 1109 is just above (pink). Nice! What is not cool is how uncomfortable I am with price action to the indicators these days. It is becoming very irrational IMO and that is why I am so uncomfortable. When things that normally make sense stop - somethin ain't right. Now here is where I go all screwball on you. See that C=A target? Well that is where the weekly 200ma lies right now as well. What about that 5=1 target? 1204? Dude? Dude, I know, I know. Hell, I got sick this morning when I mentioned 1180 as a possible target not to mention my upper target of 1121. I am NOT calling these, just merely pointing out the possibilities. They do not seem likely given the position of the dollar, the minis, the divergences and the IMO total dis-functionality of anything right now. Now do you see why I am struggling? It was hard enough to believe this thing could bottom in March with all the troubles or even make it to this point. (I won't mention the inverse head and shoulders target of 1355, OK?)

I'll post a weekly chart tomorrow. Bottom line is all along I have wanted a nice retracement to reset the lower trrendline so the market had a little more room to run higher and this last low (wave 4 of C IMO at this time) has set up for the 5 to run. Either I have a fever or have drunken too much of the manipulation cool aide (which has kept my calls better than most) . I'll reassess and grind over this for a while. Pure TA says toppy now. Not sure why I can't bite. Maybe I'll be back to normal tomorrow.

Oh, I got admitted into the ZeroHedge DARPA program today. LOL - I hope they don't see this shit - oops - I'm on there RSS - Hey you guys and girls - ignore this post please. 

Comments and prayers are appreciated. Speaking of prayers, don't forget Vetran's Day.