Wednesday, August 6, 2014
Candle Quicks:Shanghai, S&P Emini, 10yr Tsy, Eurodollar Fut, Dollar, Crude
Shanghai Index: Last night formed a bearish hanging man. This followed a prior session hanging man which also marked a 12th new high (streteched). The lower close last night helps to confirm the bearish implications of Monday’s trade. (Bearish)
S&P Emini: The highlight is last Thursday’s decline of 40 points (open to close). This is greater than any since Jan 24. The three sessions following Thursday failed to recover half the loss. The recovery on Monday was rebuffed. (Bearish)
TYU4 (Ten Yr Treasury): Strong Bullish candle on Friday followed a bullish hammer on Thursday. The late May high and reverse has been a strong area of resistance. Lately the July 23 doji high settle at 13+ has kept advance at bay. A settle through this level could set stage for more aggressive advance. (Bullish)
EDM6 (Green June Eurodollar): The bullish hammer bottom of July 31 (Thur) marks recent low following consolidation test/break below. Friday’s advance open to close the largest (9.5 bps) since April 4 employment report. Yesterday’s pull-back unimpressive. Still early in recovery to mark hard on yesterday’s stall. (Bullish)
DXY (Dollar Index): Bullish break-out in early trade today. New high today marks 14th without 3 session pause (very stretched). Yesterday’s price action formed a possible shooting star. Reverse today needed to confirm (settle below 81.314). (Agnostic-with eye toward bear reverse)
CLU4 (Crude): Yesterday’s price action engulfed the prior sessions advance, creating a bearish continuation. The bullish hammer from Friday was confirmed in Monday’s price action, but subsequent trade puts that prospect into question. There has been 8 new lows without a 3 session pause (slightly stretched). A lower settle today would help to confirm the bearish implications of bearish engulfing. Otherwise, there remains a risk for recovery to 100 prior to completion of expected move to 95.