Here's an update of what the market looks like from ES and FX's perspective and what's going on in the EU as that is the market fulcrum today (really pretty much every day, just today the US is very light on data). The longer term positive positioning of the Euro remains, but it does appear we will see some near term weakness/pullback (intraday is a bit positive).
As for news, Merkel is keeping the thumb screws tight on Greece, batting down any talk of loosening of the terms of the bailout. Merkel also shot down any talk of a 3rd aide package and finally she expects Greece to form a government quickly that is stable (code for not rocking the boat as far as the terms of the memorandum of agreement). So thus far it seems Merkel is going to make it harder for Greece to form a government, she's been very quick to nip any talk of changing the terms of the bailout. It's interesting how Spain is treated vs Greece, I suppose the more damage your country can do to the Euro-zone, the more favorable your treatment.
Since just before the NY open (there was a small positive divergence going in to the NY 9:30 EDT open), ES hasn't done much .
A closer view showing the pre-market positive divergence which is reflected on the market averages opening divergences which were positive as well, then we see an intraday negative at the 10:45 highs this a.m. and a VERY small positive around the 11:15 lows and pretty much in line since, no major signals, it seems there's a "Wait and see" mentality in the market.
CONTEXT for ES has been mostly negative, but keep in mind to the far left many important markets weren't open that go in to the construction of the model, we saw a brief period of convergence and since the model has been more negative than ES itself. I need to take a look at the specifics in our risk asset indicators.
Context's SPY arbitrage is relatively neutral.
Here's the 9:30 market open on the EUR/USD chart.
As for 3C for the Euro...
There's an intraday positive at the lows, it is actually in a leading positive position right now, but keep in mind this is for intraday moves.
At the more important 3 min chart you can see how 3C has been falling off in to a leading negative position last Friday, we can also see the 1 min positive reflected on today's 3 min chart at the white arrow.
At 5 mins you can better see last week's more negative tone in the underlying 3C trade and again a relative positive recently today.
The even more important (larger trnd) 15 min chart since the negative divergence at the May 30/31 top, downside confirmation and then a positive and then a leading positive divergence. Ultimately the longer term trend still looks positive, the short term trend looks like the Euro wants to pullback while intraday we have a small positive from where we are now.
The even more important 30 min chart still remains very positive and with all of the shorts in the Euro, seems to continue to reflect the probability of a short squeeze.
Intraday the $USD was negative on its gap up open.
The 2 min confirms this intraday negative on the opening gap, but...
The trend of the 2 min zoomed out a bit looks a bit more positive, just as the Euro's 3C trend in this timeframe or thereabouts looks like there's some near term deterioration in the Euro, as we'd expect to see for confirmation, the $USD is showing some near term strength in the underlying trend, thus far a perfect confirmation of what the 3C Euro charts have shown.
At 3 mins, the recent positive change is visible in the $USD.
The 5 min even shows a bit of positive character as well.
The more important 15 min is still leading negative
As is the hourly.
To sum it up, the longer term trend still favors upside in the Euro./ downside in the dollar, however it appears we will see a Euro pullback and some $USD strength perhaps over the next day or few days (depending on how the signals develop). Intraday it looks like the Euro has a slight edge to move a bit higher, perhaps it tests resistance.
No comments:
Post a Comment