The Shrinking Euro

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

I wanted to provide an explanation as to why this blog space has not been updated for the past number of days. There was a death in the family and I needed to help tend to the matters associated with that.

The chart above is a daily March Euro Currency. The Euro has fallen precipitously from its high versus the U.S. Dollar since its November and December highs. Today’s action appears to have kicked off a new leg to the downside.

The news events surrounding this are continued questions over the debt of Greece plus other “Euro Nations” and also reaction to the daily economic news items of U.S. Housing Starts, PPI and earnings announcements from a number of the U.S. Banks. There was also the Massachusetts Senatorial election to digest. A Republican actually won in that state, filling that left open by the death of Senator Edward Kennedy some months ago.

Perhaps as important as any of the already mentioned news items was more out of China regarding the head of banking regulation requesting banks to stop lending money until the end of the month. This has created what is turning out to be a flight to safety or quality in the U.S. Dollar and hurting commodities of all sorts and currencies of other nations. Metals too are under a great deal of pressure with Gold down $30.00 per ounce and Silver down 90 cents per ounce.

Back to the chart above, I have included the Fibonacci extension targets which show the .618 extension at approximately 14008 and the .750 at approximately 13886. These may be reasonable price objectives to look for in the relatively near term picture.

If anyone would care to add anything or comment on what is looking to be an important day in the markets please do so. As we conclude this the Dow Jones Industrials, which hasn’t been mentioned, are roughly 160 points lower on the day.

Good trading to all

Jeff
CB&S

Reversal Of Energy Fortune

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We thought these weekly Crude Oil and RBOB Gasoline charts were very worth noting. Both are exhibiting weekly reversal potential and in the case of the RBOB one that may be more of the sweeping variety.

Also of significance are the Fibonacci retracement levels. In the case of the RBOB its high so far is almost right on the .500 line. And what adds to the significance or perhaps the potential significance, is that from that level the price appears to be halting abruptly and reversing course. For the Crude Oil it may be a sign of relative weakness as compared to the RBOB Gasoline in that it is showing signs of failing from a price level far shorter of the .500 retracement.

These are situations that may provide substantial trade opportunities and we thought you should know. Anyone interested in further discussion can give us a shout. We’d be happy to hear from you.

Good trading to all

Jeff
CB&S

Reversal Or Routine Tuesday

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

The chart above is a daily CASH NASDAQ COMPOSITE.

What appears of interest here is that yesterday saw a new high for the move with a lower close recorded. Perhaps more importantly is that today’s trading range has left a gap beneath the low of yesterday trading range. This may be an indication of an impending correction. As can be seen there were gaps left on the chart while the market was moving up. Following yesterday’s reversal bar this small gap may hold a much larger significance. We will likely be finding out rather soon.

Of other interest is action in many of the other markets. Gold was down more than $20.00 per ounce, Silver down more than 40 cents per ounce, crude oil down roughly 200 points and the grain markets under great pressure with Corn down the 30 cent per bushel daily permissible limit following release of the January USDA Crop Report

Earlier in the day we sent out charts to our email list of a number of markets displaying similar traits. Gold and the Euro Currency, for example, illustrated where the recent highs corresponded to key Fibonacci resistance levels and where, like the NASDAQ Composite above, others such as Copper displayed daily reversal bars in very recent trading sessions.

We will soon find out if this was a one day wonder Tuesday reversal day or if there is greater cause to believe a substantial correction to these many up trends is in process. We suggest everyone stay tuned as this could become very interesting. We will share any measuring implications as soon as we can discern.

Good trading to all


Jeff
CB&S

Determinig Dollar Support Levels

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

The purpose of today’s chart and blog is to show that the U.S. Dollar Index has reached the first of the significant Fibonacci retracement levels. The chart above depicts the spot U.S. Dollar Index and the levels we find most important to be aware of concerning Fibonacci retracements. Those prices are approx.: 7681; 7630; 7580.45. They represent the .382, .500 and .618 Fib retracement levels as calculated from the November 26 low of 7417 to the December 22 high of 7844.9.

Traders believing, for example, that the U.S. Dollar has potential to move higher versus the basket of other currencies may want to use these price levels to help determine when or how to initiate positions.

Fibonacci retracement levels can also be determined for the various other currencies such as the Euro Currency for example. Some market participants might prefer this if their opinion or analysis suggests that one such as the Euro might perform particularly weak as compared to the U.S. Dollar over a certain period of time.

This is something that we frequently discuss and strategize with our clients. If interested in finding out more from us please send an email or call. Our Trade Focus is also available by weekly email. Sign-up is available through this blog as well.

Good trading to all

Jeff
CB&S

Silver Retracement Levels And ...........

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

The chart above is a daily Comex / Globex March Silver with 50 day moving average and fib retracement. Chart by CQG.

This morning we sent a tweet that said March Silver futures had reached the .500 Fibonacci retracement level and that our underlying technical indicators suggested to us that the market might find resistance there. It did not.

The .500 level was 1813.25. The next important retracement level is the .618 Fib which comes to 1845.523.

The U.S. Dollar remains a factor as well as the stock indices. The intermediate term underlying technical condition appears quite overbought. This condition, however, does not show up at the daily level. In fact, although not completely positive, they are nearing a cross over into what we consider a positive position.

The longer term basis weekly data actually shows our underlying technicals as being in negative territory. This would help support the view that this upward price movement is corrective in nature.

Good trading to all

Jeff
CB&S