In Forex and Futures Commentary

 

The stock market rally went as far as the middle of last night, with SPX futures climbing steadily before the sellers came stomping in again. We didn’t even get our shoes on. Yesterday I expected it to run up into the 1100’s before coming down, but SPX resistance levels held strong on 1066 and we ended up with a daily doji bar on the actual index……indecision. Lower close, we look lower. Mixed sentiment right now and looking to sell on rallies. Europe, Asia, the UK and Australia are all mixed tonight, up or down a few percent. The last time this happened (in terms of % not dollars) we kept on moving lower, but a push higher before that happens is not out of the question. People are reacting negatively, again, on government action, and no new dramatic news than what has already been discussed is on the radar.

Most notably today, oil sank fast and steadily, with the longer term downside target still intact. If we can get a clue from this selloff today its that risk, as a very general term in this market is still very vulnerable. Look for a breakout of the lows at 77.00

Gold, nothing much to talk about. The dollar index is flat for the day and so is gold. Still looking for a break downside of 823.00 for fast selling/more dollar buying indications. Mixed conditions altogether for now, however.

The dollar index is still hanging in below the 764 retracement level and expecting it to consolidate here.

Overall looking for sells on rallies for GBP/USD, USD/JPY, EUR/USD etc. over the next couple days given the current correlation climate. Stronger dollar for now, but overall seeing consolidation around here, good for some range trading. Look for a support fallback on EUR, GBP of already broken longer term trend lines (on hourly charts) for use of support. And don’t forget that EUR and others still have open gaps…….could be a push to fill them. These pairs have struggled to gain upside momentum and haven’t done a great job of doing so.

Levels:

EUR has buys at 1.3456, 1.3410, 1.3260, sells at 1.3687, 1.3770, 1.3900
GBP has buys at 1.7326, 1.7261, 1.7184, 1.7040 sells at 1.7550, 1.7633-50, 1.7718, 1.7740 area, 1.7842
JPY has buys at 100.35, 99.60, 98.65, 98.00 sells at 103.22, 103.72, 104.53, 104.98, 105.50, 106.05
CHF has buys at 1.1276, 1.1224, 1.1147, 1.1089, sells at 1.1443, 1.1489, 1.1590
AUD has buys at 0.6804, 0.6660, 0.6546 sells at 0.7043, 0.7130-50, 0.7235, 0.7312, 0.7350, 0.7487

Some reading for today:

Crude Oil Falls a Second Day on Skepticism Bailout Plan to Bolster Demand
Yen Rises on Speculation Falling Stocks Will Reduce Demand for Carry Trade
Gold Climbs on Concern Credit Crisis May Spread, Weakening Asia Currencies
Trichet Says Credit Crisis Calls for Return to Bretton Woods `Discipline'
Euro May Slide 13% vs Yen on Credit Crunch, Citigroup's Fitzpatrick Says

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