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Jamie's Market Thoughts: 05/24/11

Jamie's Market Thoughts: 05/24/11

2011-05-24 23:59:00
Jamie Saettele, CMT, Sr. Technical Strategist
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SPY (S&P ETF) Daily

052411market_body_spy.png, Jamie's Market Thoughts: 05/24/11

Prepared by Jamie Saettele, CMT

All of the selling this week took place before the Monday’s New York session. Since the open yesterday, equities have stabilized. Monday’s low occurred at a short term support line and just before the 4/19 high (important because of 4/20 gap open). Respect the potential for a rebound to close the gap left from Monday’s open.

30 Yr. US Treasury Bond Daily

052411market_body_usb.png, Jamie's Market Thoughts: 05/24/11

Prepared by Jamie Saettele, CMT

I’ve been waiting for the long bond to test channel resistance and the measured level above 126. A top and reversal for bonds would be bullish for Yen crosses and carry in general. There is little else to say on this front until a test of the channel and reversal or a break below 123 23/32 (which would suggest that a top is already in place).

EURUSD Daily

052411market_body_eurusd.png, Jamie's Market Thoughts: 05/24/11

Prepared by Jamie Saettele, CMT

The EURUSD has held above 14000 on a daily closing basis and formed an inside day today. Divergence with momentum between Monday’s low and the 5/16 low is suggestive of a recovery or at least additional consolidation. The indicator plotted is a 20 day disparity index (measures the % difference between the close and the 20 day average). Notice the tendency for lows to form (if even for just a few weeks) in the 2.5%-3% area (5 previous times in last 2 years).

NZDUSD 60 Minute

052411market_body_nzdusd.png, Jamie's Market Thoughts: 05/24/11

Prepared by Jamie Saettele, CMT

An inverse head and shoulders pattern is evident on the short term NZDUSD chart. With the decline from 8121 in 3 waves, expectations are for a test of the high at minimum. If the advance from 7858 unfolds as a 3rd wave, then the 2008 high will be exceeded.

USDCHF 60 Minute

052411market_body_usdchf.png, Jamie's Market Thoughts: 05/24/11

Prepared by Jamie Saettele, CMT

A USDCHF secondary low may still be in place at 8750 but a drop below would NOT negate the longer term bottoming pattern. In fact, a drop below would probably find solid support at 8700 (61.8% retracement). Keep an eye on the short term channel for support as well.

Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Monday), technical analysis of currency crosseson Wednesday and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forex Stream. A graduate of Bucknell University, he holds the Chartered Market Technician (CMT) designation from the Market Technician Association. He is the author of Sentiment in the Forex Market. Send requests to receive his reports via email to jsaettele@dailyfx.com.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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