LunaticTrader

Investing with the Moon

Posts Tagged ‘Euro’

Where does the Euro strength come from?

Posted by Danny on September 14, 2015

Stock market volatility has calmed down a bit and most markets ended the week on a positive note. We have a few more lunar green period days to go and then we will enter a new red period. If the market is going to retest and possibly take out its recent lows, then its best chance to do so is probably in the second half of September.
Let’s have a look at the situation in the S&P 500 (click image to enlarge it):

S&P 500

The S&P is looking for direction after the late August drop. If the market pushes higher then 2050 could be reached fairly quickly. The slower Earl2 indicator (orange line) has turned up from a major low, which is good to see, but that doesn’t rule out another leg lower in the next couple of weeks. The faster Earl (blue line) is going quite high already and may turn down this week. I think the better odds are for a push towards 2040, followed by consolidation for the rest of the month.

A lot of traders will be watching central banking decisions this week. I don’t know whether it will make any difference. I can easily imagine interest rates being nudged higher and see stocks go up rather than down as a result. Would be a typical example of “sell the rumor, buy the news”. Many investors have been selling the ongoing rumor that rates are going to be hiked, so who will be left to sell? It is the uncertainty of an upcoming rate hike that has been hanging over the market for months, and once the step is taken that uncertainty is taken away. We can actually ponder what would be more positive for stocks: keeping rates at zero while telling people that the economy remains too weak… OR raising rates and telling people that the economy is strong enough to do so?

As chart of the week I am choosing the Euro versus Dollar, because it may also contain clues going forward. The Euro has been surprisingly resilient recently (click image to enlarge it):

euro

Since March the Euro has been painting higher highs and higher lows. The 1.15 level has been major resistance for a while and the most recent attempt to break out above it failed. Bullish energy (green in the iceberg chart) is once again rising quickly, so a second attempt appears to be in the making. It is not clear where this Euro strength is coming from. But it is not rare for markets to move first, with the fundamentals that justify the move becoming clear later on. Anyway, a successful break above 1.15 would open the door towards 1.25.

Danny

Posted in Financial Astrology, Market Commentary | Tagged: , , | 4 Comments »

Key reversal levels for week of August 4, 2014

Posted by Danny on August 3, 2014

Our key tables and comments for this week, now in slideshow format. Click the “Expand” button (bottom right) to watch in full screen mode. Click on “Slideshare” (bottom left) if you want to save and print it.
If you have any trouble to see the presentation below, then you can also click here.

Good luck, Danny

 

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Key reversal levels for week of July 21, 2014

Posted by Danny on July 20, 2014

Our key tables and comments for this week, now in slideshow format (click on expand button to see in fullscreen).
If you have any trouble to see the presentation below, then you can also watch it directly on slideshare.

Stay tuned, Danny

 

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Key reversal levels for week of July 14, 2014

Posted by Danny on July 13, 2014

Our key tables and comments for this week :

* The FTSE100 index has gone into fully bearish mode, the first major market to do so. The DAX is weak as well, but still holding above its weekly key reversal level. Both are testing their Bottom1 targets already. The US markets have been stronger and remain bullish with upward MoM on the weekly level.

* In the daily key levels all major stock indexes are showing downward MoM, which means a pullback is underway. Is it the start of something bigger? That is always possible. Every bear market starts with one down candle and with one down swing. Right now there is no reason for panic, but if the US and Japanese market also drop below their daily key reversal levels, then the outlook for stocks will darken. So I wait and see.

* For the Nasdaq we have a new Top2 target at 4659.

* In other world markets the French CAC 40 has gone into bearish mode. Several other European markets are coming close to do so as well: Italy and Switzerland. New problems brewing in Europe? Hmmm, just old problems resurfacing… Weekly MoM has also turned down for the MSCI World index, marking a possible long term peak.

* Bonds (TLT) have bounced back, but weekly MoM keeps pointing down for the bond market.

* Gold is back to fully bullish. $1415 is the Top1 target if we get another leg upwards. Now it is becoming DO time for gold.

* The Euro is stuck around 1.36. Key levels are bearish for the Euro at the moment, but that doesn’t mean much in a market that has been going sideways for so long. A big move will come, but which way? Plenty of traders are probably looking to go long Euro on a breakout above 1.40, or to go short on drop below 1.34…, and that may or may not work, as fake out moves have become common. In a coiled market like this one I like to take a look at the monthly key levels for direction. Monthly MoM for $EURUSD is going down since May (it had been going up since August 2012) and a monthly close below 1.3264 would confirm the next major move is indeed down.

* Oil has dropped below its weekly key level and is now fully bearish. The Bottom1 target for oil is 94.60

* Our weekly key reversal levels for the 30 Dow stocks are available here. 28 stocks are bullish this week, up from 27 last week. Above 20 is healthy, see : Keeping an eye on the Dow stocks.

* A reader wrote me to tell how boring it is, e.g. my posts keep repeating “healthy bull market” for the Dow Jones week after week.
What to do? It is not as if shorting the Dow Industrials has been profitable in recent months. I can only repeat George Soros on that point: “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”
If the key reversal levels are boring it is actually a good sign, it means they are not pointing in a different direction every other week. And that can only mean we are getting good trending moves. E.g. the Nasdaq has been in weekly bullish mode for 79 weeks and counting. It doesn’t get any more boring than that. When we started posting them the weekly key reversal level for the Nasdaq was at 3221, now it stands at 4109, so that is 900 points of Nasdaq profit quietly locked in by our key levels. Meanwhile plenty of other analysts/bloggers have been trying to nail the top since the beginning of last year (if not before). I am sure they have not been bored. But how much have they lost by now (provided they trade their own calls)? 20%, 30%, more? By the time we actually do get a correction it will perhaps give them back half of the money they lost, or back to breakeven if they are lucky (provided they have not given up trading their own calls by then). That’s a big price to pay for being able to say “told you so”.
Some day our key levels will stop saying “healthy bull market”. Maybe next week, next month, next year… It will come.

***

Here are the updated tables.

Key reversal levels for next week:

Weekly Current Mode Key (W) MoM (W) Weeks % Ch.
Nasdaq 4,415.49 4,109.03 6.88 79 42.93
S&P 500 1,967.57 1,861.01 7.57 84 38.92
Nikkei 15,164.04 14,607.06 3.08 5 -0.26
FTSE 100 6,690.20 6,834.48 1.32 0 0.00
DAX 9,666.34 9,409.44 4.08 15 0.46
Bonds (TLT) 113.58 109.23 2.31 24 6.46
Gold (spot) 1,338.12 1,279.81 0.47 3 1.76
$EURUSD 1.3607 1.3729 -2.19 8 -0.60
Oil (CL) 100.83 104.15 2.36 0 0.00

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Latest daily key reversal levels:

7/11/2014 Current W Mode Key (D) MoM (D) Days % Ch. Str. #
Nasdaq 4,415.49 4,342.43 3.49 35 6.76 2
S&P 500 1,967.57 1,948.25 3.24 35 4.20 2
Nikkei 15,164.04 15,128.86 1.04 36 5.22 2
FTSE 100 6,690.20 6,797.17 -2.79 3 -0.72 11
DAX 9,666.34 9,908.46 -3.60 3 -1.25 7
Bonds (TLT) 113.58 111.94 0.90 3 0.82 5
Gold (spot) 1,338.12 1,299.15 3.36 21 5.12 17
$EURUSD 1.3607 1.3643 -0.33 5 0.10 15
Oil (CL) 100.83 104.71 -5.52 5 -2.81 11

(Legend: Mode : green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | W = weekly mode | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Our current key target zones (we use a +/-1% zone around these targets):

Key Targets Top1 Top2 Bottom1 Bottom2
Nasdaq 4531 4659 * 3975 3742
S&P 500 2001 2031 1755 1641
Nikkei 15976 17220 13860 12940
FTSE 100 6800 7110 6642 6230
DAX 10240 10450 9682 8715
Bonds (TLT) 114.60 115.70 108.25 102
Gold (spot) 1415 1541 1160 1075
$EURUSD 1.3950 1.42 1.3403 1.2870
Crude Oil(CL) 109.24 112.47 94.60 91.85

(* = new or updated target ) (for more details about these key targets, see: https://lunatictrader.wordpress.com/2013/08/20/key-target-levels/ )

Good luck, Danny

 

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Key reversal levels for week of June 16, 2014

Posted by Danny on June 15, 2014

Comments for this week :

* Stock markets are hesitating after the recent series of new highs. On the weekly level the bull markets are  intact, but in the daily key reversal levels we now see all major indexes with downward MoM, and the FTSE100 has fallen into bearish mode. This can be considered a first warning sign.

* The S&P 500 reached our Top1 target at 1950, as we tweeted live, and failed to break above it. It’s hard to tell whether this will be just a short term peak, or a level that we won’t see back for while. Either way, we now have an interesting new Top2 target for the S&P 500 at 2031

* In other world markets the Chinese markets is grabbing upward MoM and coming very close to going into bullish mode. Most markets remain well above their weekly key reversal level.

* Bonds (TLT) are trying to get into rally mode again. TLT needs a daily close above 112.54 to do so.

* Gold has strengthened further. A weekly close above $1311.12 would turn gold fully bullish, and would probably give us a good trending move. Keeping an eye on it.

* The Euro is still weak, but is not giving up too much territory. MoM is to the downside, but as long as the Euro hovers near 1.35 it wouldn’t take much to turn things around.

* Oil has finally cracked above its Top1 target at $104, so now the path is open for a climb towards 109-110, where our next price targets are.

* Our weekly key reversal levels for the 30 Dow stocks are available here. 26 stocks are bullish this week, down from 28 last week. Above 20 is healthy, see : Keeping an eye on the Dow stocks.

***

Here are the tables.

Key reversal levels for next week:

Weekly Current Mode Key (W) MoM (W) Weeks % Ch.
Nasdaq 4,310.65 4,028.87 2.28 75 39.54
S&P 500 1,936.16 1,827.71 5.53 80 36.70
Nikkei 15,097.84 14,386.16 0.04 1 -0.70
FTSE 100 6,777.90 6,704.26 2.85 6 -0.65
DAX 9,912.87 9,305.46 4.33 11 3.02
Bonds (TLT) 112.15 108.72 4.46 20 5.12
Gold (spot) 1,276.85 1,311.12 -1.96 2 2.21
$EURUSD 1.3540 1.3773 -1.69 4 -1.09
Oil (CL) 106.91 99.76 1.79 17 6.78

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Latest daily key reversal levels:

6/13/2014 Current W Mode Key (D) MoM (D) Days % Ch. Str. #
Nasdaq 4,310.65 4,227.45 6.28 16 4.22 2
S&P 500 1,936.16 1,918.69 5.63 16 2.54 2
Nikkei 15,097.84 14,747.45 6.30 16 4.77 2
FTSE 100 6,777.90 6,843.54 0.28 0 0.00 35
DAX 9,912.87 9,852.69 2.63 37 3.24 2
Bonds (TLT) 112.15 112.54 -3.35 8 0.35 8
Gold (spot) 1,276.85 1,257.63 -0.48 1 0.31 9
$EURUSD 1.3540 1.3662 -3.63 25 -1.51 11
Oil (CL) 106.91 102.50 5.00 22 4.91 1

(Legend: Mode : green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | W = weekly mode | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Our current key target zones (we use a +/-1% zone around these targets):

Key Targets Top1 Top2 Bottom1 Bottom2
Nasdaq 4390 4531 3975 3742
S&P 500 1950 2031 * 1755 1641
Nikkei 15650 17220 13860 12940
FTSE 100 6800 7110 6230 5980
DAX 10240 10450 8715 8510
Bonds (TLT) 114.60 115.70 108.25 * 102
Gold (spot) 1424 1541 1160 * 1075
$EURUSD 1.3950 1.42 1.3366 1.2870
Crude Oil(CL) 109.24 109.97 * 94.60 91.85

(* = new or updated target ) (for more details about these key targets, see: https://lunatictrader.wordpress.com/2013/08/20/key-target-levels/ )

Stay tuned, Danny

 

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Key reversal levels for week of May 26, 2014

Posted by Danny on May 25, 2014

Comments for this week :

* In the weekly key reversal levels for major stock indexes we have momentum (MoM) turning up for the Nasdaq and Nikkei. This means all major markets are trying to push higher again.

* On the daily level markets have turned to bullish mode as well. It is always hard to tell how far a move will carry. Best is to go with the flow and respond when the situation changes again.

* In other world markets the Hong Kong and Russian indexes are turning bullish. This leaves only a few countries with bearish setups.

* Bonds (TLT) are hesitating since they reached their Top1 target at 114.60. Money may start flowing back into stocks and that would weigh on bond prices going forward.

* Gold is not moving at all recently. It remains mildy bullish in our key reversal system,  but it wouldn’t take much to turn it fully bearish. A big move is likely so I am watching the key levels carefully on this one.

* The Euro has gone fully bearish. Needs a weekly close above 1.3829 to get in the bullish camp again.

* Our weekly key reversal levels for the 30 Dow stocks are available here. 25 stocks are bullish this week, up from 24 last week. Above 20 is healthy, see : Keeping an eye on the Dow stocks.

***

Here are the tables.

Key reversal levels for next week:

Weekly Current Mode Key (W) MoM (W) Weeks % Ch.
Nasdaq 4,185.81 3,990.47 -1.25 72 35.50
S&P 500 1,900.53 1,807.91 3.23 77 34.19
Nikkei 14,462.17 14,852.38 -2.17 10 1.46
FTSE 100 6,815.80 6,653.81 2.09 3 -0.10
DAX 9,768.01 9,205.97 1.75 8 1.52
Bonds (TLT) 112.70 107.89 5.16 17 5.64
Gold (spot) 1,292.41 1,280.24 -0.60 14 -1.95
$EURUSD 1.3628 1.3829 0.31 1 -0.45
Oil (CL) 104.35 98.86 0.99 14 4.22

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Latest daily key reversal levels:

23/05/2014 Current W Mode Key (D) MoM (D) Days % Ch. Str. #
Nasdaq 4,185.81 4,091.34 1.34 2 1.20 1
S&P 500 1,900.53 1,874.22 0.97 2 0.65 1
Nikkei 14,462.17 14,148.00 -1.26 1 0.35 13
FTSE 100 6,815.80 6,767.96 1.25 22 2.01 2
DAX 9,768.01 9,570.23 2.33 22 1.73 17
Bonds (TLT) 112.70 111.56 2.52 33 3.61 2
Gold (spot) 1,292.41 1,286.13 -0.41 7 -1.01 6
$EURUSD 1.3628 1.3769 -5.37 10 -0.87 27
Oil (CL) 104.35 101.19 5.11 8 2.39 1

(Legend: Mode : green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | W = weekly mode | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Our current key target zones (we use a +/-1% zone around these targets):

Key Targets Top1 Top2 Bottom1 Bottom2
Nasdaq 4390 4531 3975 3742
S&P 500 1870 1950 1755 1641
Nikkei 15650 17220 13860 12940
FTSE 100 6800 7110 * 6230 5980
DAX 9800 10240 8715 8510
Bonds (TLT) 114.60 115.70 102 96.25
Gold (spot) 1424 1541 1185 1075
$EURUSD 1.3950 1.42 1.3390 1.2870
Crude Oil(CL) 104 109.80 94.60 91.85

(* = new or updated target ) (for more details about these key targets, see: https://lunatictrader.wordpress.com/2013/08/20/key-target-levels/ )

Good luck, Danny

 

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Key reversal levels for week of July 22, 2013

Posted by Danny on July 20, 2013

Our key reversal levels going into next week:

Status Key (W) Mom (W) Mode Key (D) Mom (D)
Nasdaq BULL S: 3294 Up RALLY S: 3502 Down *
S&P 500 BULL S: 1563 Up RALLY S: 1647.50 Up
Nikkei BULL S: 12450 Up RALLY S: 13885 Down *
FTSE 100 BULL S: 6249 Up RALLY S: 6420 Up
DAX BULL S: 7819 Up * RALLY S: 8087 Up
Bonds (TLT) BEAR R: 116.40 Down DECLINE R: 110.44 Up
Gold (spot) BEAR R: 1448 Up * DECLINE R: 1295.55 Up
Euro/US$ BEAR R: 1.3186 Up * RALLY * R: 1.3035 Up
Crude Oil(CL) BULL S: 93.47 Up RALLY S: 101.88 Up

(Legend: W = weekly, D = daily, R = resistance, S = support, Mom = momentum, * = change from previous week/day)

Important developments:

* The weekly momentum for Dax is now Up, as was already the case for the other covered stock markets.

* For most stock markets the daily momentum is now stalling and for the Nasdaq and Nikkei it has turned Down already. This is the first sign of a potential peak. When that happens it is not a reason for instant panic, but it is a sign to get more careful and protect your profits with a well chosen stop-loss. When daily momentum turns down after a significant rally, then I start putting my stop-loss a few ticks below the previous day’s low. This often keeps me in the rally if there is more to come (which then turns the daily momentum back up after a few days), and if weakness continues then I get stopped out for a nice profit. E.g. Friday’s low for the Nasdaq was 3578.57, so for Monday I put my stop at ~3578.50. The Nasdaq has been in rally mode since it closed above 3435 in early July, so this locks in some 130 points profit in just two weeks, with potentially more to come if the daily momentum turns back up before the stop-loss gets hit.

* Gold has continued to fail at its daily key reversal, so remains in declining mode. But its weekly momentum is now turning up, be it tentatively. This is a first sign that it could go on to test its weekly key resistance (currently at $1448), but to do so it will need to take the next hurdle by closing above that daily key. Gold has now been stuck just below its daily key resistance for 7 trading days in a row, so it will be interesting to see which way it goes. I think we will find out next week.

* The Euro has shifted into rally mode last week, and also its weekly momentum is now turning up. Positive developments, but we need to get follow through. The Euro is in a rather narrow sideways range, and that’s why the weekly and daily key reversal levels are so close to each other. In that case the momentum can turn several times before a clear trending move emerges.

* Oil has continued to push higher, but its daily momentum is now starting to stall and may turn down next week. I keep a stop-loss near $105 and will move my stop closer to the market if the daily momentum turns down.

PS: I try to send out timely tweets when major markets are at important junctures, so follow @lunatictrader1 if you want to be kept up to date.

Good luck,
Danny

 

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Will the Euro point the way?

Posted by Danny on July 17, 2013

Yesterday the Euro/US$ closed above its daily key reversal level and is now officially in rally mode.
It still needs a weekly close above 1.3188 to get into bullish status again.

The Euro could be pointing the way forward for several other markets as well.
E.g. gold has been moving up and down with the Euro in recent months, so if the Euro rallies further, then look for gold to get into rally mode as well. Gold has failed to close above its daily key resistance so far this week, but I would expect it to break out to the upside if the Euro continues to go up.

The US stock markets have done just the opposite, they have been going down whenever the Euro went up since February. So, if this negative correlation continues, then a further rise in the Euro would mean new downside action in the stock market.

So, that’s several good reasons to keep an eye on the Euro, even if you are not trading currencies.

Stay tuned,
Danny

 

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Sell Euro

Posted by Danny on June 19, 2013

I am getting a sell signal for the Euro/US$ (click for larger image):

Euro

The 1.34 level also happened to be our upside target for the Euro.

***

Meanwhile, both the Nasdaq and the S&P 500 have closed above their daily reversal key levels, putting them in rally mode again.
Their daily support key levels are now at 1626 for the S&P, and at 3422 for the Nasdaq Composite.
If they fall back to close below these levels within days, then it would indicate a false breakout and probably a sharp swing to the downside. If the market can hold on to the gains, then look for a further rise into July.

***

Gold weakened significantly yesterday, in line with the sell signal we posted last week.
There is a chance that the $1350 level will hold for a triple bottom, and then things would start looking better going forward. If the support at 1350 gets broken, then gold can go to 1200 or even 1100 rather quickly.

Be well,
Danny

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LT wave chart

Posted by Danny on February 19, 2013

Markets have continued to move in line with expectations.
Most major indices remain near overhead resistance lines, but there is no breakout to the upside (yet), and meanwhile we have entered a lunar Red Period.
Here is the Nasdaq chart (click for larger image):

Nasdaq

This market has reached our 3200 target, but seems to struggle to go higher, as we expected. I continue to look for a minor pullback in the next weeks and then another rally attempt in early March.
The Earl2 indicator is now clearly turning down. This means that any new highs we may see in the coming weeks, will be opportunities to sell and take profits. By the time the Earl2 bottoms out we will likely be able to buy at or below the current levels.
This means we should at least tighten our stops and be ready to get out as soon as a broader decline sets in.
Currently, a close below 3140 would be a strong indication to get out.

Today I also want to introduce something new, which I have been working on for a couple of months.
This is the “LT wave” chart (December through to March 2013):

LT wave chart

The purpose of this wave chart is to spot shorter term moves (a few days) and to identify potential peaks and bottoms in advance. It also helps to estimate the strength or weakness of upcoming lunar red and green periods.
The lunar cycle is a major ingredient in this chart, but not the only ingredient. There is a “secret sauce”, so to speak.
So how to use it?
The orange line shows the daily signal, while the blue line is obtained by applying a 3 day smoothing filter, and the yellow line uses a 9 day smoothing. Values above 1 indicate strength, below 1 suggests weakness. I mostly use the blue line.
For this week the LT wave suggests weakness until Wednesday-Thursday, but Friday shows a strong upwards spike, which will be the peak value for February. In March we will get peak values on the 12th and 13th. If we get new highs on any of these days, then it are supposed to be good chances to take profits, or initiate positions to benefit from a downside move.
Let’s see how it pans out.

***

As chart of the week we take a look at the Euro vs US$ (click for larger image):

Euro

The Euro has dropped back from its recent peak, and my Earl2 indicator is turning down. The shorter Earl is well below zero, which means we are likely to get an upward bounce first, before turning down and fall further.
So, look for the Euro to hold up until well into March, then probably another leg down (and the Eurozone crisis back in the news)

Good luck,
Danny

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