EOD Market Update.
" the formation of the bear flag continues, yes the market is advancing, but that's what a bear flag is, a consolidation that moves in the opposite direction of the preceding trend which was down coming in to the flag.
The 3C charts still suggest very strongly that we see a head fake breakout of the flag to the upside and while we haven't seen the head fake below as of yet, there are still good signals to suggest that probability as well, I assume it would be very early next week, however this is a smaller probability than the upside move."
Also see... Market Update and Some Probabilities from the EOD Friday.
The USD/JPY seems to be helping in the divergences seen (negative) in the shorter intraday timeframes late Friday as the carry pair broke below long term support as well as the 200-day moving average this morning at $101.23...
As the 3C signals suggested late Friday in intraday timeframes (1-3 mins ) which were negative, we are seeing early weakness as expected Friday afternoon for the start of the new week, at least early on.
Only the Yen is showing a 1 min negative divegrence, the $USD is in line, NOT positive, so it's not the strongest divergence for USD/JPY to gain,
In China spot Iron Ore prices have fallen to 18 month lows, this is the same commodity price action seen a couple of months ago when companies were defaulting on debt as the banks called loans that were backed by commodities, thus the commodity (iron ore) selling to meet the cash calls (thus the low prices). There's more evidence of banking troubles as China enacted new domestic banking regulations aimed at curbing growth in their shadow banking system.
The Shanghai Comp is down with Financials leading the way.
Other banking weakness is felt in Europe with Deutsche bank raising massive capital, something I have long suspected and addressed Friday when talking about what banks are doing with POMO profits as they certainly aren't putting them in the market as evidenced by the weakness in the last two POMO Tuesdays. Speaking of which, there's a $1.5-$2bn POMO on deck for today in short term notes, we'll see if that has any effect, but I suspect banks are raising capital and not putting it at risk as evidenced by April's month end window dressing and the F_E_D's massive 1-day fixed rate reverse repo at the second largest ever , well above $200 bn as banks dress windows for month end to throw off investors and regulators by making their capital position look stronger than it is by borrowing from the F_E_D for a day, the last day of April when they close out their books.
Other evidence includes a Bank of America survey published last week in which Global Money Managers are at the HIGHEST CASH POSITION IN TWO YEARS! The survey also said that America was the worst place to invest according to global money managers.
There's not much tier 1 data on deck today, but the F_E_D's Fisher and Williams speak in Dallas at 12:10 p.m. with Bernanke speaking in Dallas at 12:50 p.m. and as mentioned, the $1.5-$2 bn 11 a.m. POMO today.
TF and NQ intraday have small positive divergences as seen above in TF and ES is inline. The Yen looks ready to fall in early action, but the $USD remains weak looking, yet there is a positive divegrence in USD/JPY on intraday 1 min charts.
No comments:
Post a Comment