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Tuesday 30 November 2010

Close to a break

It seems that almost everyone is bearish this morning, but on balance I'm leaning bullish now. December tends to be a bullish month for equities and unless we see some key support levels break down today or tomorrow, I think there's an excellent argument that wave 4 on SPX bottomed yesterday, and that we're watching the start of wave 5 up now. Pug's in agreement on his primary scenario unless we see a break downwards through triangle support.

After a very careful look at ES I think we're in a descending triangle, a bearish pattern that breaks downwards 64% of the time UNLESS price rises into the pattern, as it does here, in which case it is a continuation pattern, breaking up 73% of the time. Here are the stats on Bulkowski's site:

On NQ the lower trendline of the rising channel on NQ held yesterday, just, and we're close to declining resistance from the high at 2157.5. The rising channel is within a possible larger declining channel, thanks to grednfer for pointing that out:

Whether the break is down or up, we're close to that break now and we may well see it today or tomorrow. The key support and resistance levels on ES and NQ are now:
  • NQ rising channel support at 2124
  • NQ declining resistance at 2157.5
  • ES descending triangle support at 1172.5
  • ES descending triangle resistance at 1196
A break with confidence up or down through those levels will signal a big move in that direction, though it is worth mentioning that triangles have a very nasty habit of making a fake break in one direction and then playing out in the other. Stops should be used carefully until the direction of the breakout is absolutely clear.

My 60min Vix chart, with a little right-angled and ascending broadening formation that I've posted a few times before made the latest peak yesterday just below 24. It may touch again slightly higher, but unless we see a break up through resistance, the next target is just under 18 for a fourth visit to that level:

On my EURUSD chart my declining channel support trendline was hit overnight and has held so far. It is a weak trendline though, derived mainly from the upper trendline, and it may not hold long:

Looking at the main USD chart on DX, I'm not seeing any really good argument for a big reversal here, and the obvious next target is a possible big IHS neckline at 83.6. The JPYUSD chart has a similar target just under 86. There is a good argument for a reversal here on the main USD currency pair charts though, and if we see one then it could well look like this:

Now that being bullish on USD no longer carries a risk of forced entry to an institution for the cognitively disadvantaged I'm happily and firmly bullish on USD as we stand here. The USD trend has changed and my upside targets are 87 (weekly triangle) or 94 (weekly rising channel). Once we see a wave 5 up on SPX that should coincide with a retracement on USD, then the next big wave down on USD should deliver a matching big move down on equities, and that's what I'm looking for here.

We could easily break down rather than up on equities here though, and USD might move up to that 83.6 target without a significant retracement first. If so then I'll be looking for a target in the 1130 - 1150 SPX area. One way or the other I think there's an excellent chance that we will see the break today.

Monday 29 November 2010

Mushy Lows

I had an idea of what I'd expect to see at the end of last week, and it was to see EURUSD & GBPUSD make nice lows at support, and then a few days of recovery this week during which ES & NQ would probably make new highs to finish off wave 5 of the equities wave up from the August lows. That would create an ideal shorting opportunity with equities and USD moving in sync with equities falling and USD rising, rather than the out of sync chop we have seen over the last couple of weeks.

Unfortunately that just didn't happen. EURUSD made a very mushy and unreliable low at support, rather than the nice clean bounce I was hoping for, and GBPUSD fell through short term support altogether. I wasn't surprised to see both make new lows overnight and to see that they failed to break declining resistance this morning. That's not great for the bear side here as it looks clear watching equities and USD in recent weeks that the wave up in equities doesn't seem to have finished, and until it does, a rising USD won't do much more that stall equities near this level or a bit lower.

I've looked closely again at the EURUSD and GBPUSD charts and I have a candidate declining channel on EURUSD. If it's right, then we'll see EURUSD make the next low soon in the 1.30 area. Within that declining channel EURUSD is declining more steeply within a smaller declining channel, and I'm looking for a break with confidence of the upper trendline of that smaller rising channel to signal that the next EURUSD low has been made:

On GBPUSD I have another candidate declining channel with the next downside target in the 1.545 area. There is a falling wedge within that declining channel and I'm watching for a break of the upper wedge trendline to signal that the next GBPUSD low has been made:

There's a nice looking falling wedge on AUDUSD, and that low was made fairly cleanly on Friday, but there's a distinct possibility that AUDUSD could break down into a declining channel and I've marked the alternate lower trendline on the chart:

So what's this saying for equities? Well in my view the outlook for post-Thanksgiving week looks weak until USD makes the next interim high. ES is in a triangle on the hourly chart and the most likely scenario looks like a test of rising support in the 1180 area. If that breaks with confidence then I'd expect a test of the recent lows:

On NQ I'm seeing a triangle within a rising channel. I'm expecting to see the triangle break down towards channel support slightly over 2120:

I'll break my usual limit rule and post a sixth chart today, and that's the simply beautiful chart for silver, with a really nice broadening ascending wedge from the 18 area. It looks weak at the moment, with a double top and negative divergence on daily RSI, but as long as it lasts, the wedge gives excellent entry and exit levels, and if it breaks down, silver will look like an excellent short term short:

Friday 26 November 2010

Dollar Bull

We've seen an impressive move up on USD this week. Most impressive however has been the overnight break back up through the H&S neckline into what would have been wave 1 if this had been a wave 4 move. Clearly it wasn't a wave 4 move and the upside looks wide open for USD now:

Short term we look due for a counter-trend bounce on EURUSD back to declining resistance but it looks as though EURUSD may not have got the memo about that as it is currently breaking down through support for the current falling wedge, having already broken down through rising support from the May low overnight:

GBPUSD also looks due for a counter-trend bounce here but if EURUSD breaks down through support then GBPUSD should follow:

Much depends on USD today. If the support trendline on EURUSD particularly fails and there is no counter-trend bounce, then prospects for equities look bleak today, and I'd expect rising support there to be broken as well. There is decent rising support established on both ES and NQ, with three touches on each support trendline. Rising support on ES is in the 1177-8 area on an established triangle:

On NQ established support is in the 2116 - 20 area within a rising channel:

Longer term the current move on USD is, if not necessarily the end of the bull move on equities in August, very probably the beginning of the end of it. I've been considering the possibility that we would see a counter-trend bounce on EURUSD here targeting declining resistance in the 1.35 to 1.36 area, and that at the same time we might make weak new highs on equities with negative divergence on RSI, but to do that we would obviously have to have a bounce on EURUSD, which is really looking incredibly weak. I have an alternative support trendline in the 1.3075 area and that might provide support. I'll be looking for a bounce there with corresponding bounces on ES and NQ at support. If the current wave down on EURUSD is as long as the first wave though, that would target 1.295 and obviously if this is a third wave down, it could well be longer. Bottom line is that I'm expecting a retracement for USD at 83.5 if we get there on this wave up, and I think that's possible.

If USD does make 83.5 on this wave up, I'd be expecting short-term rising support on ES and NQ to break so we'll see. Putting the SPX bull case here is Pug, who has left his last EOD post open for public viewing. Well worth a read here.

Wednesday 24 November 2010

Selling the Rips

We saw some major trendline breaks yesterday, and while I don't entirely trust this decline yet, the obvious next move for SPX seems to be towards the 1130s and there's a significant chance that this could go further. On the USD chart the declining channel was broken with considerable confidence yesterday, and the next triangle target is in the 85 to 87 area. There is a potential reversal area in the 80.5 to 81 area, and if USD starts to look really bullish, then the next reversal target would be at 83.5, for the neckline of a potential H&S pattern:

There are still a couple of key levels I'd like to see broken to complete the short term USD bull, equities bear picture. USD has broken declining resistance but EURUSD has not yet broken rising support. That's in the 1.323 area and may be tested today, as EURUSD has dipped below 1.33 while I've been writing. I can't capture a chart for that today but I'll be watching that level for a reversal.

The other level I'd like to see broken is the lower trendline of the rising channel on Nasdaq. This has been tested hard in recent days but has held so far. I'd like to see a move below 2100 in trading hours today ideally:

On SPX the rising channel is now broken. There's a neckline for a possible H&S in the 1173 area but I wouldn't necessarily expect a bounce there as the H&S would complete on reaching it:

I posted some charts of individual stocks at the weekend to illustrate how significant the resistance level at the last high was on many charts. One of those was AMZN, and the chart gives a sense of how far this retracement could go if it picks up some speed. Thought-provoking:

Hard to say how much further downside we can can expect in the remainder of the week in this holiday trading. I'd be expecting serious falls to happen next week. If so then we may well find that both EURUSD and ES bounce if EURUSD hits support today.

Tuesday 23 November 2010

Technical Difficulties

My main charting computer went down yesterday afternoon and all my futures and live forex charts have gone down with it for the time being. For today I'm just using stockcharts, as that is web-based. I'll be doing computer open-heart surgery today and tomorrow to get back to normal service. If that fails, it will be time to look for a deal online for a new computer.

I've been expecting the current retracement to resolve bullishly and I'm still expecting that, but I'll spend some time today considering the possibility that this might go the other way. We're close to key support on SPX and key resistance on USD, and it's worth looking at where those levels are and what the implications are if they break.

Firstly on SPX where after last week's low it is clear that SPX is in a rising channel that is a model of technical perfection. Here it is on the daily chart, and it really is a beauty:

Note also the parallel lines I have drawn in in red, as a mainly notional declining channel / range between January and October this year, and how last week's low retested the broken upper trendline perfectly.

Now that doesn't mean of course that this must resolve bullishly, but it does underline that as we stand today, the SPX move up from the summer lows is in robust technical shape, albeit at major resistance levels, and until that changes the trend is still up.

There is some reason to think that this might resolve bearishly though. We are still close to the channel support trendline and a move below 1180 SPX now would break down through it. There is also a possible H&S forming, with a target at 1119 SPX, that you can see here on the 60min chart:

I've posted often before that equities and USD are strongly inversely intertwined, and that a break up on USD here would move likely end this wave up on equities. It's hard to believe that USD can do anything other than fall under the stewardship of the Fed, but some winds of change are blowing in the US, and it may be that the Republicans may be able to restrain the Fed from the reckless money printing that has dominated the last two years, and from the push to devalue USD that has dominated the second half of 2010 after the USD top in early June.

On the weekly USD chart we hit a key support trendline a few weeks ago, and it held on a weekly basis. If the bounce holds and breaks recent highs then there are two patterns in play. First is the triangle, with a target in the 87 area, and a rising channel upper trendline with a target in the 94 area:

First however, USD will need to break the declining channel from the June high. In practical terms a daily close over 79 would deliver that, and yesterday's close was at 78.69. The upper trendline of the channel has already been tested hard and is looking a little ragged now. It could break and this daily chart with SPX as the background illustrates the likely implications for equities if it does:

I've posted before a little right-angled and ascending broadening formation that I have on the Vix 60min chart. Here it is again, and unless the support trendline breaks, with a pattern target of 13 that I'm not taking too seriously, then the next move should be up with a target in the 23.5 area, which would obviously be negative for equities:

I've been reading a lot recently from Carl Futia and others that this retracement will go down further and then reverse to an upwards target in the 1300 area. I disagree, as we're clearly testing major support and resistance levels on SPX and USD respectively at the moment. If these break then this current equities uptrend will be broken, and the recent high was a major interim top. I'd be expecting a move then to retest support at 1130 SPX and that might well also be broken.

Until we see those breaks though, there's only one good risk / reward trade at an unbroken major support level, and that's obviously to go long. Only when that support breaks does the short trade become more attractive.

Monday 22 November 2010

Bullish Reversal Patterns

The market often reverses with only subtle and ambiguous signals, but every so often it reverses direction with a series of reversal patterns so clear that the reversal seems to be written in the sky in letters of fire. Today is one of those times, and while it may be that the bullish patterns will fail, I have rarely seen a bullish reversal setup that looked so wide ranging, and so clear, than the one we're looking at at the start of this week.

I am still a little cautious here, because in the bigger picture we are at a key resistance area on many charts, and I posted some of those for a weekend post that are well worth a look. However on many other charts, long term and worldwide, that resistance area has already been broken, and we've been retesting broken resistance over the last two weeks. We might yet go down here, but on the balance of probabilities I think we seem likely to rise further, and the bullish pattern setup this morning on numerous indices looks likely to resolve upwards after a dip today.

On ES we matched the high from a few days ago in overnight trading, and a very nice looking IHS is forming with a target in the 1241 area. I have trendline rising support in the 1194 - 1196 area and that looks the most likely target for the right shoulder to bottom out:

On NQ (Nasdaq) we have another nice looking IHS forming with a target in the 2208 area. The left shoulder bottomed at 2120 and that is a possibility for the right shoulder too, especially as that has been an often visited support / resistance area in the last few days. I do also have a nice looking rising channel with support in the 2136 - 2138 area though, and it's possible that the retracement may bottom there:

I watch silver carefully as an indicator for equities direction and on silver we have another nice looking IHS forming with a target in the 30.8 area. The left shoulder troughed in the 26.5 area, and that is a target for the right shoulder too, but I have another nice looking rising channel on silver, with an unproven lower trendline, and if we should bounce there, then silver should find support in the 26.8 to 27 area:

USD direction is something I'm always watching for market direction and I generally use EURUSD as a proxy because it's 55% of the USD index. On EURUSD we have yet another nice looking IHS forming with a target in the 1.41 area. The left shoulder troughed in the 1.357 area, and that's looking ambitious for the right shoulder but that level has been an important support / resistance area and it could make it back there. I have a nice looking rising channel on EURUSD that would fit with a retracement that deep. I have a smaller rising support trendline in the 1.368 area though, and that could hold the retracement:

GBPUSD stands out from the other charts that I'm posting this morning, if only because there isn't a large IHS forming on it. Declining resistance from the high was tested this morning, and held, but looks likely to break on the next sweep up. Short term there is a triangle forming on GBP with the next support in the 1.598 area, and there is a risk that this triangle may break downwards today towards a target at 1.584 if EURUSD does retrace deeply to make the right shoulder on that:

So there we have it, a very nice series of bullish reversal patterns to start the week. They may not play out of course, and any pattern can fail to complete or play out to target, but momentum is with the bulls as it stands here, and this looks likely to me to resolve upwards this week after a dip to make the right shoulders on all of these patterns today.

Saturday 20 November 2010

Thought-provoking charts Pt1

AMZN Weekly:

AMZN Daily - Rising Channel and Rising Wedge:

SLB Weekly:

AA Weekly:

Friday 19 November 2010

SPX Higher High Roadmap

As I was expecting SPX and Nasdaq broke declining resistance from the recent highs yesterday, and it is therefore now more than likely in my view that the recent retracement has bottomed and that we are either in the dying stages of wave 4 correction or in the early stages of a wave 5 up. The next milestone on ES is to make a higher high than the recent high at 1205.75, and a promising pattern setup has developed since the high yesterday that may well deliver that.

In the short term a rectangle has developed on ES. This is a bullish pattern that breaks up 69% of the time, and these patterns are a particular favorite of mine. The rectangle target is in the 1206 to 1206.5 area, and on a break up I'd expect to see that made. While it lasts there are some nice entries and exits playing the range within the rectangle which is 1194 - 1199.75. Now the 1206 area is a very significant one because as well as being the area of the recent high, it is also the neckline for a potential IHS indicating to the 1241 area. If this were to play out ideally we would see the rectangle play out to target at the neckline, then a reversal to make the right shoulder with a target in the 1191.5 area, and then a break of the neckline with a run up to the IHS target in the 1241 area. That target area is also the target area for the large IHS on SPX that formed in the summer of course. Here's how that might look on the ES 15min chart:

If the ES rectangle breaks downwards, which they do 31% of the time of course, the downside target would be in the 1188 ES area, and the potential IHS would still be in play, but we'd lose the nice pattern setup to deliver it that I'm seeing at the moment.

In terms of other indicators of market direction, silver has been coming along very nicely from a bullish perspective. It rose 5% yesterday against 1% for gold, so the gold:silver ratio dropped heavily which is very bullish. It has also cleared the initial upside target that I was watching, which was the upper trendline of the potential declining channel that the broken falling wedge might have evolved into. Rising and falling wedges often evolve into rising or falling channels so that is always the first target to watch. As silver has now cleared that trendline the falling wedge target measures back to the recent high over $29 and, in practical terms, new highs from there. Here it is on the silver 60min chart:

On the forex front EURUSD is also looking bullish, and broke declining resistance from the high yesterday. An IHS has also developed with the neckline broken overnight, and the IHS target is in the 1.385 area:

Now obviously the Euro has problems, and the Irish bailout is in the news at the moment and dragging on it somewhat. That is a concern and casts some doubt on whether my ultimate upside EURUSD target in the 1.45 to 1.50 area can be made. I think that's missing the point though, as many currencies have significant issues at the moment, and in the Euro's favor it doesn't have a central bank committed to devaluation and a huge expansion of the money supply like the US. Forex beauty contests at the moment are composed mainly of ugly stepsisters, which is the reason gold is doing so well as an alternative store of value that can't be debased by well meaning fools with PhDs.

On GBPUSD there has also been an impressive rise, with a step through the first significant resistance trendline overnight. GBPUSD is currently stalled at the declining resistance trendline from the recent high and there's some negative divergence on the 60min RSI so we could see a significant retracement here. Here it is on the 60min chart:

I was looking at oil last night and that's also looking bullish, with a gently broadening ascending wedge that has developed with the next upside target in the 90 area (Jan 2011 e-mini futures). Support is in the 80.4 area and looks fairly solid with three touches on the support trendline. I know Carl Futia is bearish on oil (while bullish on SPX after a further fall to the 1130 - 1150 area), and that's because the intermediate term supply / demand fundamentals stink. The supply / demand fundamentals have stunk all the way up from $30 though, so that's not an immediate cause for concern, and the risk/reward on oil looks pretty good here. Here's the wedge on the daily chart:

On Carl Futia's view that this retracement isn't finished, he could be right, though obviously I disagree on the basis of what I'm seeing at the moment. From my perspective, a retracement that went to 1130 - 1150 would break a lot of key support levels and might also carry USD up through declining channel resistance. That would cause enough technical damage that this would no longer look like a wave 4 retracement, and much more downside would be opened up as a result. That's possible, but it doesn't look probable to me right now, though we'll only know for sure when we make a new high on SPX of course.

Thursday 18 November 2010

The Moment of Truth

While we've been retracing, I and many others have been playing this on the assumption that we are looking at a wave 4 retracement here, and that it would be followed by a wave 5 up after the retracement bottomed. There's a good argument in my view that this wave 4 retracement has bottomed this week, and that the new wave 5 up has started. That wave 5 up on SPX would target at least a new high, but would most likely target somewhere in the 1250 to 1300 area over the next few weeks, with a EURUSD target in the 1.45 to 1.50 area.

There are a number of reasons to think the retracement has bottomed, mainly that the obvious retracement targets in a number of areas have been hit, notably on the USD bounce, XLF and others. One commodity that I watch very carefully is silver, and there I've been watching what looks like a classic retracement low. You can't see all of it on this chart, but silver has retraced to the support trendline from where the cuurrent advance started at just under 18, forming a falling wedge on the decline, with a small IHS in the reversal area that played out to target overnight:

Now silver's important because it is part of the gold:silver ratio indicator, and because it tends to outperform gold on waves up. When silver is in a wave up stocks tend to perform well too, and if silver has bottomed, the chances are that stocks have also bottomed.

We don't yet have confirmation that stocks have bottomed yet of course, but we may well get that today, as NQ and ES are both nearing a test of their declining resistance trendlines. On the Nasdaq futures (NQ) I'm seeing declining resistance in the 2130 area. A touch there is a perfect short entry of course, as it is declining resistance on a declining pattern, and the risk/reward for a short entry there is therefore excellent with a stop slightly above the trendline. On a break of that trendline however it becomes an excellent long entry for the further upside that should follow that break:

Encouragingly for the long side here, declining resistance on the broadening descending wedge on the corresponding Nasdaq chart is at 2110, and that has already been convincingly broken in overnight trading, though we could pull back within it before the open of course:

On ES I'm seeing declining resistance in the 1192.5 area, and again that is a nice short entry with a tight stop in case the retracement has further to go:

Unlike on Nasdaq, the ES and SPX charts match up almost exactly, and declining resistance on SPX is in the 1195 area:

I'm leaning towards a break up here, and while I share the bears' feelings that this bull market is more bull than market, I don't think the Fed's credit cards are maxed out yet, and until they are, this bull market is likely to continue. If we get a nice wave 5 up here, then we should reach a level within a few weeks where there are some unambiguously excellent short entries for what should then be a very decent pullback. Bears should be patient, and if we do break up, then we should all just settle in and enjoy the ride.

Wednesday 17 November 2010

US Dollar Hits Retracement Target

I've been posting about the likely USD bounce for a couple of weeks, and yesterday we hit the target for the retracement, if indeed it is just a retracement, when $USD hit the upper trendline of the declining channel:

Any higher than this in my view and we're looking at a major bullish breakout on USD, with my next pattern target over 85. It's a bit hard to see that happening with the Fed seemingly so committed to devaluation but that's my line in the sand, and in any case we should expect USD to pull back a bit from this key resistance level in the short term.

I've been looking for a lower target on EURUSD so I looked again at the chart after USD hit target yesterday and saw that EURUSD has hit the right reversal level for a rising channel on EURUSD, rather than the possible broadening wedge I had been looking at. If that rising channel holds then the next upside target is in the 1.45 to 1.50 area, so this is an interesting level for a spec long with a stop below the lower channel trendline:

What USD does here has big implications for equities. If USD reverses from resistance and resumes its swan dive downwards, then in all probability we are seeing the end of the current SPX retracement, and the start of a fresh wave up on equities. If USD breaks resistance and heads higher, then we should see a lot more downside on equities and commodities, and the big move up from July, which has piggybacked heavily on the declining dollar, is most likely over. I'm expecting a USD reversal back down here, but I'm keeping an open mind in case it goes the other way.

A lot of charts hit key retracement targets yesterday. One that I've posted here a couple of times recently is XLF, where the broken declining channel upper trendline was retested yesterday. There are many other charts that look like this, and if USD does reverse here, that's why yesterday looks like a significant swing low:

In the short term on equities, the declining channels that I posted on SPX and Nasdaq yesterday have turned out to be broadening descending wedges. There's a similar wedge on Dow as well. Here's the wedge on the Nasdaq 15min chart:

Here's the wedge on the SPX 15min chart:

I'm expecting a bounce today. That could be the start of a fresh wave up and if so, the declining resistance trendlines that are the upper trendlines of these wedges will break up. That would be a strong long signal. If we reach those upper wedge trendlines today then resistance will be in the 1197.5 area for SPX and the 2122 area on Nasdaq.

Regardless of whether we break up from these patterns there is most likely one and perhaps two excellent entries there. The first is the short from declining resistance. Shorting declining patterns is always a nice trade as stops can be tight and within a short time your stop can be below your entry level. Going long is a lot chancier as there's always a significant risk of a second lower trendline hit further down. The possible second good entry is if those resistance levels are broken, as that would be a good entry level for the further upside that would then be extremely likely.

Tuesday 16 November 2010

Bouncing Yen, Collapsing Bonds

There's not much to say on equities today. Obviously SPX is still in a declining channel, and the next downside target is in the 1184 - 1186 area, depending when we hit it today. There is obviously a chance that won't be hit, but support at 1195 SPX broke overnight, and I think a downside trendline hit is now more than likely. After that hit the upside target will be in the 1200 - 1202 SPX area, and a break up from the declining channel will signal that this retracement may well be over, though if this has just been the A wave of an ABC retracement, then there may be more downside coming after a bounce. Here it is on the SPX 15min chart:

The declining channel on the Nasdaq isn't as pretty, but looks just as playable, and the downside target is slightly under 2100 today:

In terms of USD, which is the driver of so much of what we see on equities in these days of devaluation and runaway monetary inflation, we have almost reached the top of the declining channel on the daily chart, which I have at slightly over 79. Obviously once we reach it we then see whether the declining channel holds, and USD resumes its plunge into oblivion, or the declining channel breaks, and we see a bounce back to the weekly triangle target in the mid-80s. That could still go either way  think. Obviously the Fed is determined to devalue USD, and they are in a position to deliver that, but equally the trading partners (and creditors) of the US are not happy to let them do that, and we don't know yet how that disagreement is going to play out. Here's the declining channel on the USD daily chart:

One thing that has been comical to watch over the last three years has been the flight to safety trade, where whenever equities have fallen, we have seen a flight to areas of perceived relative safety notably, and amusingly, to US treasuries and the Yen. That's amusing, as a flight to safety, because it has seemed increasingly unlikely over this period that the US will ever be able to repay its debts, and Japan, several years ahead in this respect, is already insolvent on any reasonable basis, with a debt in terms of GDP per head that is 50% higher than in Greece.

For whatever reason, and we should definitely consider the possibility that it is because there is now no perceived risk of a major decline in equities in the near future, the flight to safety trade has collapsed on this current equities retracement. Yen is retracing from close to an all time high. On the USDJPY chart that is reversed of course, so that's playing out as a bounce from support with the obvious target being 86 to finish the head on an IHS. Here it is on a 17 year weekly chart:

On US treasuries the start of QE2 is having a similar effect to the one we saw at the start of QE1, with a major fall in bonds and spike in long term US interest rates. So far these have spiked from 3.5% in the summer to almost 4.4%. The obvious long term resistance trendline is at 4.7% and they may well reverse there, though there is a very real possibility that the thirty year bull market in bonds ended in late 2008, and that interest rates will break resistance and go much higher. Here's the 20 year monthly $TYX chart for 30 year T-Bond Yields to show what I mean:

The bond chart is possibly the most important longer term chart to watch nowadays, as for all its impressive power to print money, unless the Fed is happy to mop up all demand for treasuries just by printing money, it still needs to maintain confidence in bondholders that they will get their money back. That is complicated by the fact that many US treasuries are held overseas and that the Fed must keep yields and thereby interest rates low in order to protect the US economy from an interest rate shock. If $5 trillion of US treasuries is held by foreigners, and that appears to be about right, then a 10% devaluation in USD is effectively a $500bn windfall tax on foreigners holding US treasuries that yield a small fraction of that. Small wonder that enthusiasm for USD devaluation is very limited outside the US.