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Thursday 6 October 2011

Steve Jobs Dies at 56

I won't talk much about Steve Jobs today, because there's nothing I would say that Tim Knight won't say more eloquently and more knowledgeably. Jobs was a giant however, and arguably the Thomas Edison of the modern Age. His contribution to the development of the user-friendly personal computer was immense, and his impact on the music, film and home electronics industries particularly was also huge. The world is a poorer place after his tragically early death at only 56 and our thoughts should go to his family at this very difficult time for them.

I've been giving a lot of thought this morning to the significance of the low this week. and whether it might prove to be a major low. That's possible and the impulsive-looking rise of the last two days lends some weight to that. On ES I'm mainly watching my declining channel on ES. Strong resistance today is at 1148.25, the overnight high so far, and declining channel resistance in the 1160 area:
On NQ the obvious rally resistance was reached overnight at broken rising channel support. We might well see failure here and the possible rising wedge forming on NQ since the low this week is worth keeping an eye on:
The TF hourly chart is very thought-provoking here. The low this week was at an important support trendline which is also a candidate upsloping H&S neckline. I'm watching declining resistance at 670 but if that breaks we could see a rise into (very possibly) 738.6 to form the right shoulder on this pattern. One to watch:
Essentially a lot of charts are bouncing at possible upsloping H&S necklines. We need to remember that these necklines are often not horizontal of course. Copper futures may be doing the same and there's room for a considerable bounce here:
The situation is less clear on oil, with CL bouncing at minor support and the unresolved matter of the beautiful H&S on USO that I posted yesterday morning. There's definitely room for a bounce here though and a higher level to short it from would obviously be nice:
EURUSD may also be bouncing at an upsloping neckline, though I haven't marked it on the chart. EURUSD has bounced at a significant support trendline and the obvious near term resistance levels are in the 1.34 and 1.35 area. A break above 1.35 would open up a move to broken support in the 1.385 area:
On SI I posted the large declining channel that was established at the recent low at the time and there's clearly a lot of room to bounce on silver.  I'm seeing significant resistance at the 33.6 level (last high), the 36.9 level and declining channel resistance is obviously still over 40:
Last chart of the day is 30yr treasury futures, where a very significant top may be in. I'm watching support at the blue trendline in the 143'15 area and 142 after that. I was talking last week about how the first break of a significant trendline was often followed by a recovery and then a much more serious break. Something to bear in mind here:
I've been considering the case that we have made a very significant low this week and it's possible, but that doesn't mean that we have. There's a lot of resistance immediately overhead and I'll be watching those levels on ES, NQ and TF to see what happens there. We now have a confirmed Vix Buy (equities) Signal but as I pointed out in my chart yesterday, the last two of those in recent weeks were both bull traps and so the signal is best disregarded unless we see some serious resistance breaks. Until those resistance levels are broken the obvious trade here is short and this rally could fail at any time. Something to bear in mind though.

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