$SPX looking at a close above its 200 day EMA

200 Day EMA currency pair update.

Im checking out that the 20 day EMA is about to cross over the 200 day EMA in the GBP.USD, thought I would give you guys a little moving average update.

Currency Pairs that I follow Above / Below their 200 Day EMA's

Above 200 Day EMA'

GBP.USD
Days Above 8

EUR.JPY
Days Above 3

EUR.USD
Days Above 11

NZD. USD
Days Above 11

GBP.JPY
Days Above 1

AUD.USD
Days Above 22

AUD.JPY
Days Above 11

Below 200 Day EMA
CHF.USD
Days Below 18

USD.JPY
Days Below 16

USD.CAD
Days Below 21

Can Gordon Brown Talk his Way to 1.70 GBP.USD?

Some Longer Term $SPX Thoughts.

A major player in the markets are the institutions. Institutional buying is up. BEWARE from the short Side.


Personally I think the markets will represent a great short this summer but at waiting until 1050 / 1060 ish on the $SPX.
Below is a daily $SPX Cash chart of the past 10 years. What Im observing for the market to move higher is
we had no problem pushing through the 2003 Bear Market low's. This was not a bad recession by any means.
Right now the economy is still in the shitter just going down the toilet at a less bad pace. Next stop to Push through is the Range bound area we were post 2003 recession. (First Blue highlighted area). I think that if the economy continues to deteriorate at a less bad pace or the gov. gets better at manipulating the statistics (I mean how much worse can they get they already suck at it). We will push to this no problem. The 1050 - 1150 area represents serious overhead supply this is where I think we have another october breakdown and the theory of Green shoots flies out the window. This is where I think the great shorting opportunities are going to be. Just some longer term monday thoughts.

Lots of economic data coming out this week.

Hard to say whats going to happen in the Market this coming week. Its kinda like the old traders adage, lets just sit and watch and see if you can scalp a few points here and there. I've been watching the dollar pretty closely, It had a horrid month (at least there is a lack of direction there). For the month of May the Dollar index was down 547 Pips or 6.5% . I thinks its pretty safe to say that risk apetite will weight heavily in the dollar (when does it not). We just had Q1 GDP confirm that economic activity in the U.S. is at it worst levels in years. Some people will point to consumer confidence numbers but I think that has a lot to do with the recent 3 month rise in the equity markets). This week is pretty important because there are a number of economic announcements coming out that covery pretty much every facet of the U.S. economy, weather you believe in Green Shoots or not (I Don't), after the announcements this week you will have a clear signal of weather they are for real or not. Daily FX has a great way of looking at these:

The rest of the data crossing the wires over the coming week will cover the health of the individual sectors in a little more detail. Consumers – whose spending accounts for 70 percent of the economy – will evaluated through personal income, spending and credit figures. If we are to expect a genuine economic recovery before the end of the year, we should see a turn in these figures relatively soon. From the business side of things, the ISM manufacturing and services sector surveys are due on Monday and Wednesday respectively. The outlook for factory activity has been negative for 15 months now and services seven – though the reversal since the end of 2008 has been relatively aggressive. Finally, the pending home sales figure will be a lagging indicator for the housing market, but consistent improvements from data in this group will eventually pan out to a true revival.

Daily FX on Job Figures:

It is first interesting to note that the spread on expectations has grown to be relatively tight (forecasts range between a 450,000 and 600,000 drop). More important though is the pace of job losses. If this figure prints as expected, it would mark the second month that the rate of payroll reductions slowed and it would be an overall, significant improvement on January’s record breaking 741,000. As the leading indicator for economic health, a steady improvement of this caliber could single-handedly convert a bulk of the market to believers that the world’s largest economy is on track to recovery ahead of its major trade partners.

Equity markets are one thing but if your trading FX you are looking at how things are doing relative to foreign economics. I had a trader tell me something back in late 08 when economic fundamentals were deteriorating pretty fast. "Basically it sucks in the US, but it sucks worse everywhere else"

I'd be a buyer of the EUR/USD this week on dips as it has showed serious technical strength, Im looking for it to head to 1.45 in the next couple of trading sessions its no doubt that the ECB rate decision and unemployment will weigh heavily on the pair this week. One thing to note is that rate decisions tend to have large impacts on FX markets (duh), one thing I look for is though a day or 2 after the rate decision is a pair still continuing the primary trend? Most indicators point to unchanged with the ECB rate (wouldn't surprise me) One thing traders will be looking for though is the ECB gonna pursue more aggressive monetary measures. Many peoples fears of overly aggressive monetary and fiscal expansion have helped fuel this strength in the Euro.

Lets see what happens

Auzzie

Here is a currency that I just love. Not only is it a high yielder and a commodity currency but whats not to love about that base...

USD.JPY strategy for the next 3 hours.

Im Watching the USD.JPY very closely the red lines are lines in the sand well the bottom one is at least... Strategy for the next 3 hours is on the chart.

China and Americas economy.

There has been the debate for awhile of weather the Chinese will dump their USD holdings Blah Blah Blah. I came across this.(" WSJ: Why Beijing Wants a strong Dollar"). Really? They dont want their foreign currency holdings to go to wallpaper!.. At the end it states the guy has a book coming out in October.. Sweet (check out Amazon Link here) It was the title that got me: "Superfusion: How China and America Became one Economy and Why the World's Prosperity Depends on It." Who knows maybe it will be one of those Books I will derive some utility from.

The /ES is coming increasing more like the Fx Markets.

Today was one of those days that I felt the /ES was characterized like a the Japanese Yen. The first chart is the /ES today and the second chart is the usd.jpy a random part I choose from April. Basically what I am trying to say is that equity markets tend to trend, where as currency markets have a general lack of direction. They just tend to have rapid gyrations in either directions, Pull up some 20 year charts of major FX pairs. (excluding the Euro), Both markets require different mindsets for trading.

Update: I just took a look @ the post and I know they look like they have the general direction up but thats not the thesis of this post. Just saying I feel the /ES has much more characteristics of FX markets.

USD.JPY

So As I write this the USD.JPY is strong as all get out. Ive got a long trade on that is 20 pips in the money. I tried to short twice earlier tonight but got busted out. One thing I noticed is this pair has problem being against its upper bollinger band just pushing away which is a sign of serious strength. Thats all for Now.

Vix Bollinger Band

$VIX had a chance to close outside its Bollinger band today. Note on the chart I use 2 Bollinger bands, 1 is set to 2 Std. Dev. and the other is to 2.6 std. deviations.

Euro Flag

There has been this large flag in the Euro that I cant get my head around. Above is a 60 day 5 minute chart. I think we are poised for a big move in one direction, over the next couple of weeks. Lets see what happens though.

Euro..

Its pretty dangerous to speculate in the currency markets this week. I have been watching the Euro and am not sure many opportunities will present themselves. But I am keeping positions small and we will see what happens. We did bounce off the fib. Some people are calling for a run to 1.40 I dont see this once u look at the order book. Plus there are pleanty of people long already. My gut tells me to be a Euro Bear. It is Stress Test Week though.