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Archive for November, 2013

Nikkei Has Hit Support Again

I will not be trading this and only passively monitoring. USDJPY and JPN225 I think give much dirtier signals and are based on much dirtier fundamentals. Long dollar positions I think are much better. (Higher yields do mean higher USDJPY, but lower equities in general, which again would drag on the Nikkei – and a whole host of risk on/off components).

jpn22520131108

The Nikkei has hit a rising trendline, tested 3 time already, established since June 2013. Yesterday’s sharp end of session bang on the yen and Nikkei has made a close around that line. Volume/momentum (in FX) indicator CMF still shows inflows, though this signal in FX is usually quite undependable and should be taken with a heavy grain of salt. The close is also slightly below a blue cloud, which serves as a support line as well, but usually gives away to further declines.

Two other, closely linked charts are somewhat troubling. First is the SPX500, which in the path of least resistance, should correct down the the lower part of the channel.

spx20131108

The next is EURJPY, which has broken a trendline set since June as well. Though the last bar was due to the surprise rate cut, such a significant decline could indicate risk off? Carry covering? (I should have my yen pair charts back…)

eurjpy20131108

Again, passive monitoring. As the recent run was due to higher US rates and Abenomics, it is also important to monitor Japanese politics, which if history serves as any guide, always has a few hiccups.

To the best of good buys.

 

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USDMXN, Buy, 10k @ 13.0945

I moved up the upper boundary a bit, and prepared an entry on pullback at 13.1000. Entered at 13.0945 when the ECB cut rates. This was the first post watching the triangle on 10/22.

usdmxn20131107

Target for symmetric triangles is measured by the height of the triangle at the widest part (13.3800-12.5900 = .7900) plus the breakout line (13.1000) which yields a final target of 13.9000 to keep it round. If it closes below the bottom of the cloud at 13.0000, monitoring is warranted, and a break below the midpoint of the triangle at 12.9000 stops the trade.

NFPs tomorrow, expected an October change of + 125k. Even with the government shutdown, I think it’s still quite likely for the jobs market to beat that. To the best of good buys.

 

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