Tuesday, August 25, 2015

No Miracle Monday, But…

Equities finished weak on Monday following a dramatic intra-session recovery while longer duration Treasuries gave up much of their earlier gains into the close.  This morning European Equities are 4% higher, in many cases more than erasing losses from yesterday.  The Emini shows gains of similar proportions currently. 

Some Technical Highlights:

·      TYU (ten yr Treasury) (CHART) formed a bearish shooting star on Monday which would be confirmed with a lower close today (similarly for FVU). 
·     USU (bond future) similarly formed a bearish doji star.  Consecutive ‘doji’ sessions suggest heightened volatility (similarly for Ultra).
·        TUU (two yr Treasury) formed a long bullish body day on Monday.  Today’s price action is thus far confined within yesterday’s body and may form a bearish Harami (similarly for many Eurodollar futures).
·        Bund (future) formed a ‘long legged’ spinning top on Monday and is well lower currently with the biggest open to current decline of any session since July 10. 
·      Crude future (rolling 1st)(CHART) found a 13th new session low without a 3 session pause on Monday. Although it is very stretched, it formed a very long black body bearish day showing strong bearish interest.  A trend channel dating from mid-July was broken with yesterday’s weakness.
·        ESU (S&P Emini) (CHART) failed to hold recovered intra-session prices and settled with deep losses and a long black body showing continued weakness and a strong confirmation of the bearish implications of the prior ‘three dark soldiers’. 
·       CRB Index opened a ‘bearish window’, gapping lower and forming a small bodied possible bullish inverted hammer.       

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