UUP/FXE UPDATE

Very quickly, the newest developments, the armed protesters have been on horseback and camel. A few were taken down by peaceful, anti-Mubarak protesters and their I.D.s were grabbed and showed to TV crews, they are apparently police. They are also threatening to burn down the square with anti-Mubarak protesters still surronded. The army that is present has done nothing except use water cannons sporadically and they are telling the protesters to leave the square which would put them directly in harms way with the pro-Mubarak armed protesters. It seems this may be a "regime" coordinated effort as the military is doing little. Remember, their military regime is in danger as long as protests against Mubarak are active. So I suppose this could be "Plan B".

To the currencies.

It seems contagion fears are starting up once again in the Euro-zone. I'm not sure what today's catalyst is, except I believe I saw a headline about German opposition to bond buying, I'll have to look around, but the euro is reacting.

 This is a chart of the EUR/USD on a 5 min scale. You can see the Euro is reacting to something, thus the dollar is gaining.

 UUP which broke obvious support yesterday (which in my thoughts was questionable as a potential false breakdown as we often see this at important levels and before reversals as a sort of bear trap) has put in something of a candlestick pattern called a tweezer bottom with nearly identical lows, it also as of now is forming a Harami reversal pattern or what we call in the U.S. "an inside day"-this is a bullish reversal pattern so this may very well have been a false breakdown/shakeout/bear trap.

 UUP 3c 1 min showing strength since yesterday, the red trendline is the support area that was broken (now resistance).

 The 5 min 3C chart looks equally as good for UUP.

 Longer term, the 15 min chart didn't even acknowledge the break of support. If this is because of accumulation on that break as it appears, then that gives more credibility to the "false breakdown" theory.

 Looking at the Euro using the ETF FXE, we see a similar inverse divergence in which the upside (possibly false breakout) is not being confirmed.


And here's FXE's 5 min 3C chart. On the 1 minute there's a small zone suggesting an intraday bounce which started around 12:15.

I'll update again as needed and at the close