Weekly Crude Oil
Nearby future on a weekly basis.
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April 30, 2008
EurGbp--Wednesday Morning, April 30, 2008
April 29, 2008
Update on 10 Year Yield Charts--Tuesday morning, April 29, 2008
Updating the charts posted on Friday and Thursday, a minor bull move in rates (bear in bonds) met some resistance at the 3.90% level on Friday, a 2.618 delta target. But both downtrend lines have clearly been broken. (See the posts referred to above for weekly charts showing how these trendlines were developed.)
April 28, 2008
Euro, Monday Morning, April 28, 2008
High on April 22nd was 1.6018.
Looking at that level as delta 2.618 and figuring retracement levels down of entire move from 1.4308 beta (December 20, 2007):
April 25, 2008
EurGbp Friday Morning, April 25, 2008
Monthly chart showing fibonacci extensions going back through 2000.
Two waves up with a long (over 4 years) wedge shaped pause centered roughly at the 1.618 level.
Alpha-beta base built in 2000-2001.
FIrst impulsive wave up reaches 2.618 target in May of 2003.
Current impulsive wave hit 4.236 target this month.
10 Yr Treasury--Friday Morning, April 25, 2008
First the nearby 10 year future on a weekly chart:
Then an updated weekly and daily chart of the TNX CBOE index of 10 year rates. (Note: I have put in an overnight high above 3.90%, although the official index only marks prices made within traditional NY 8:00 AM to 3:00 PM bond market hours. This is one reason TNX charts and CBOT 24 hour futures charts diverge at times.)
Resistance on rate chart is around 3.91% (high in February was 3.96%). On futures chart, resistance in June futures could come in at 114'12. The low in February was 113'25. Overnight future traded down to 114'20. It has rallied significantly (18/32nds) since then.
April 24, 2008
10 Year Treasury Yields--Thursday morning, April 24, 2008
Two trendlines. The shorter term line is steeper, was tested in February and broken last week. The longer term line, dating from the top last June, has not yet been broken. Market traded up to it last week (3.85%) then bounced down.
And then plotting these trendlines on a daily chart:
Lex on Chinese monetary policy
From January of this year:
"Instead of untangling the Central Bank’s process, the key to understanding China’s monetary policy may be its bias towards expansion in order to mitigate social tensions."
Lex: China’s monetary policy
Euro--Thursday morning, April 24, 2008
Two engines for short covering rally in dollar this morning.
One, there were two separate business surveys from the eurozone--the IFO from Germany and the INSEE from France--which both fell more than expected. And immediately commentators began to air the view that this is concrete evidence of damage from an elevated euro exchange rate. Damage they have been looking for, but which has seen illusive. Calls for a less hawkish ECB, etc..
The second engine is the emerging view that the Fed will pause after a 25 bp easing next week. Featured in WSJ article by Greg Ig and in chatter by bank analysts. A topping pattern in bond charts?
So you see a new scenario being ventured: Fed is done easing, ECB will not raise rates anymore and might actually begin to ease. The problem with the second part of this scenario is that it might fall within the category of wishful thinking. This is not the first time this opinion has been tossed out there, and so far every time Trichet or some other ECB official has calmly shot it down.
So--at this point--it is best to see this as primarily dollar shorts showing a little caution. There is some damage to the euro rally, but not enough to signal a change in trend. Yet.
April 23, 2008
Euro Charts--Wednesday, April 23, 2008
Daily
A view of the region between the 1.619 and 2.618 levels on an 8 hour chart:
And fibonacci levels seen on a smaller subsection on an hourly chart.
Yen--Wednesday morning, April 23, 2008
Following the charts from Sunday afternoon, April 13:
and Tuesday, April 8:
it appears that the 1.0292 top reached in two wave patterns could be seen as an alpha, with the approximately 38.2% retracement of the move as beta.
And a 4 hour view:
April 16, 2008
Euro--Wednesday Morning, April 16, 2008
Still on course for a high above 1.60. But maybe this is time to start getting out of longs.
April 13, 2008
Euro--Sunday Evening, April 13, 2008
Despite the knee jerk reaction to G7 statement, the euro is still holding to internal fib patterns that would lead to a run above 1.60. The fall this afternoon has run out of steam around the 0.486 level.
USDJPY--Sunday afternoon, April 13, 2008
The impulsive move seen on a weekly chart, the base being formed in late November through the end of December 2007.
And seen in more detail on a daily chart.
The retracement since the low in mid March, died out at a 38.2% retracement of the entire impulsive move from beta to the 2.618 delta. The retracement was in two separate wave patterns, the last of which described an impulsive move itself as shown in the post of April 8, 2008. As it was not able to get beyond 38.2% (of the impulsive move, let alone the entire move), the downward trend has not truely been broken. Thus we are in a sort of no man's land, waiting either for a resumption of a down move, or evidence of a new base being built for an impulsive move which will break that barrier right below 103.
To complicate things more, the retracement down of the two wave move up has itself been about 38.2%.
The low came last Thursday, April 10th.
My best guess is that we will likely see a break of this low, below 100 yen. Then it will be time to consider whether a new base is being formed for a new move up (perhaps this new move down will be the beta of a new base), or whether the mid March lows below 96 yen will be broken.
UPDATE at 5:40 PM
The G7 statement has thrown a little fear into dollar shorts, with the knee jerk interpretation being that co-ordinated intervention is not out of the question. Most of the move has been against the euro (and sterling to a lesser degree). The move against yen and swiss franc has been much more muted. This initial reaction is almost certainly to be tested if there is no more evidence forthcoming that the CBs are serious about this.
April 10, 2008
EURGBP-Thursday Morning, April 10, 2008
Another conjuntion of fibonacci inflection points around 0.8020-0.825 on a very long term basis.
As seen from a chart from last December, th 0.7257 top in 2003 was itself a culmination of a delta 2.618 wave from an alpha-beta base made in 2000-2001.
April 9, 2008
Euro--Wednesday Morning, April 9, 2008
Still backing and filling along fibonacci levels for a run above 1.60. So far this week it has been stuck in the middle of the range (0.382--0.618) between 1.618 and 2.618 delta targets.
UPDATE--9:30 AM
The 2 moves down since the initial top on the March 16 Sunday night Bear Sterns panic have each shown an impulsive quality, with alpha-beta bases and delta impulsive moves.
The first was described in a March 25 post , the relevant part of which was--
So far slightly more than 50% of the impulsive delta wave move has been retraced.
The second move, from March 31 to April 3 low had a very small base and an extended impulsive move, ending around the 6.854 target.
April 8, 2008
USDJPY--Tuesday evening--April 8, 2008
Two completed waves up since the low in USDJPY.
Significant word is completed. If market does not push through the 102.92 resistance (the 2.618 target of the 2nd wave), then it will have to build a new base for a move higher.
A closer look at 2nd wave pattern.
April 6, 2008
Euro--Sunday Evening, April 6, 2008
Still a better bet on the long side. Seems to be working towards a break of 1.60.
Seems to be working internal fibonacci levels between 1.618 and 2.618 delta targets.
April 3, 2008
Euro--Long Term Patterns
Looking at the remarkable rise since the low registered in November of 2005 (1.1640). The breakout in the following spring to 1.2980 (late May of 2006) as alpha, the low in late July around 1.2460 as beta. (There were actually three retracements to this approximate level after the May high: first in June to 1.2475, then the July low, and finally an October re-test at 1.2480.)
Since that base the market moved up to the 1.618 region in December of 2006, then the 2.618 region in June-July 2007. After that there have been two extrememly impulsive moves: the first which gravitated around the 4.236 level (all through the Fall of 2007 and early winter of 2008), and then the present move (the greatest part of which occurred last month (March 2008). It is approaching a 6.854 level above 1.60 (1.6035).
In a manner similar to the overlaying patterns noted in the eurgbp marketl, there is a shorter term pattern with a delta target in the same region as that shown in the weekly chart above. And like the eurgbp overlay, the alpha is the high first made above the 4.236 delta level on the weekly chart (the high made late last November at 1.4966. With this as alpha and the subsequent low in late December at 1.4308 as beta, the following pattern develops:--
The difference between the eurgbp chart and the euro chart is that the eurgbp has already met its target, while the euro is still working towards its target. If these patterns are valid, it would require a GBP rally at least as strong as an upcoming euro rally.
At the present moment the euro is trading around 1.5550--is it a buy here?
April 2, 2008
Top in Eurgbp
How long it will hold is still in question, but two patterns, one on a weekly chart going back to March of 2007, and one shorter term going back to last November, coincided with a fibonacci area of attraction aroung 0.7970-0.7980.
First the longer term pattern which was dealt with previously in three posts in January here, here and here. Eurgbp had topped out around 0.7250 in May of 2003. From then through January of 2006 it traded in a wedge pattern, with a descending trendline causing each rally attempt to fail beneath the previous high.
Then in late September the market broke above the descending trendline.
With the rally and retracement seen right before this breakout as alpha and beta, the following pattern unfolded.
Once the impulsive rally off of the beta low broke through the downtrend line, the 1.618 delta level was the first area of resistance, with the former downtrend line now forming support. The next impulsive move seemed to bring the market to a level that gravitated around the 2.618 level (rather than that level providing resistance). The same situation occurred after the next impulsive rally, with the 4.236 delta level providing a center of gravity for a month or so of range trading. Then another impulsive rally and a top around the 6.854 level.
The second pattern begins with an alpha at the top above 07600 in mid-January of this year. A beta near the end of the month projected a 2.618 delta target that converged exactly with the 6.854 delta of the longer term pattern.
