- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
- CHARTISTS MUST PUT ALL BIAS ASIDE AND LET THE CHARTS DO THE TALKING OR WE'LL SEE ONLY WHAT WE WANT TO SEE
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Friday, 15 October 2010

October Opex

There was a significant intraday decline yesterday but SPX is still in the rising channel:


USD is still working its way towards my target but EURUSD has not quite retested Wednesday night's high. I was looking at the USDJPY chart yesterday and we are now approaching a very significant level, which is the all time low set in 1995:


Treasuries have now definitely broken down from the rising channel of the last few months. If equities are going to do well over the next few months, and I'm expecting that they will, then treasuries should do badly. During QE1 treasuries trended gently downwards and I'm expecting to see the same in QE2:


I was reading some excited talk this week about a golden cross being made on SPX. The golden / death crosses are when the 50/200 SMAs cross on the daily chart, and the bullish crosses have been a very reliable indicators for future rises in the past. Looking at the chart we're close to a golden cross on SPX, but we're not quite there yet:


I'm still leaning bullish at the moment, and will be until the SPX rising channel is broken, but looking at the historical stats, trading on the day of October opex is historically bearish. On the Dow the last four have closed down, and five of the last six, with a 0.4% gain in the one exception in 2004. I'm doubtful about seeing much upside today and if we see a gap up at the open, there's a good chance that gap will be filled. If we see some downside today I have rising trendline support on ES in the 1165 area, and the SPX rising channel support also in the 1165 area which is at about 1162 on ES.

LATE NOTE:

I've just seen something that looks very important on the SPX daily chart. Have a look at the two big channels with thick trendlines on the chart, and where the upper trendlines intersect:

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