Just as the charts predicted last night, the EUR/USD headed higher from a gap down, the Yen kept falling and the Futures markets for ES, NQ and TF all went higher, more on that.
However Japan is not coming off as a 1 day knee jerk event, the bond market there- as mentioned last night, the most debt of any developed country- was halted again today. Worried Japanese investors made a major show of their flight to safety sending French and Belgian bonds to record lows, the Spanish 2 Year to sub 2%, the German 6 month bill to negative territory and the US 10/30 year are seeing a bid as well. ANYTHING BUT JGB'S! Wouldn't it be something if this QE, Mother of all QE's, not the Bazooka, but the tank that Kuroda built to halt 2 decades of deflation actually was the thing that did in the Japanese economy once and for all, at least until a new reset emerges which is probably a far better idea than papering over the problem with Yens.
Portugal is the flavor of the week in Europe and probably the next at the bailout trough as last week their constitutional court said all is fair if the government wants to pay its workers in bonds rather than cash-WHAT? Serious? YEAH, SERIOUS!
Finally (well not even close, but as close as I need to go), the earnings season is kicked off tonight as usual by Alcoa (AA).
The charts...
Currencies
EUR/USD rises overnight after a gap opening lower
USD/JPY is a little scary in how flat it is...
Single Currency Futures...
USDX 1 min has a positive divergence, maybe this helps the USD/JPY head higher, it's not going to help the EUR/USD though, however this is a short intraday chart so it will change as the day goes on and I'll update you.
USDX since the pullback on the 5 min chart shows the same small positive divergence this a.m., but it is still well within the pullback.
Yen 1 min is still leading negative so again this is good for the USD/JPY
However the larger problem of the longer term Yen charts still exists and is quite scary as it looks like the BOJ really has lost control and it's only matter of time, we'll see what that 60 min chart looks like later today to know a little more.
The Euro 1 min went positive since last night's post and in to the European open and headed higher, it has a slight negative divergence, taken with the USD's positive, the EUR/USD should see a pullback early on today.
The Euro 5 min however remains in line so I think it's just a pullback.
ES was showing up as positive in the post last night even though it had gapped down, the divergence sent ES (SPX futures ) higher, they are just about in line, but with EUR/USD trouble early on they may see some draw-down.
NQ (NASDAQ) intraday futures look VERY much like they'll see early draw-down, either pre-market or in to the open, however again these are intraday and will change.
TF (Russell 2000 Futures) also saw higher prices from last night's positive divergence, but look set to see early weakness, the thing you have to remember is this...
This is the last couple trading weeks in the SPX, note that how the market opens is exactly the opposite of how it closes, so early downside should be met with closing upside, we'll see if there are any divergences in the early going that are worth fading.
Besides that, CONTEXT for ES is already on the case working toward a green close as the ES model is 8 points above ES currently.
Is interest rates about to start going up?
-
Yes, I know - it does not make any sense - FED is about to cut
rates...but....real world interest rates are not always what FED wants it
to be.
5 years ago
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