Feb 5am, FX/S&P/BTC Commentary

Euro-1.1425. The Euro is neither near resistance nor support in the bigger picture--just at the mid-line. For today, the Euro is at exactly 50% of it's 10-day average daily range so there is room to move and as usual, I expect to the downside. Ther is good resistance between 1.1435 and 40. Can sell ahead of there with a tight stop. Look for a move to 1.1400 into the NYK close. Above 50/53, can see follow through to 74. Stg is at good support at 1.3000. A close below targets a move to 1.2850ish. $Yen is banging around the key 110.00 level. I think only a matter of time before the dollar rallies strongly. EurJpy behaved the same way when it first reached 125.00. Support is at 109.75. Can stay long ahead of there looking for new highs into the close. Below 109.75 would temporarily negate the immediate bullish bias. Next level in EurJpy is at 126 but the bigger picture target is 128 and then 130. The chart on the right is the daily EurJpy on top and the S&P on bottom and the lowest magenta, dashed horizontal line is 128. Holding above the low volume level at 125 should continue move higher. Can see starting last October that EurJpy and the S&P moved broadly together so with the S&P continuing it's march higher, I expect EurJpy to do the same

S&P-2725. As long as above 2680, expect higher prices. The first target is 2750 and then 2800 which is the dashed magenta line on the chart. Below 2680 wouldn't be bearish in the bigger picture, it would just suggest a deeper correction to between 2630 and 2600. But, I don't think markets corrects that far unless there is an unexpected news event.  Comment on the Fed: I am by no means an economist as I rely strictly on charts and horizontal lines(but its mentally stimulating to discuss global macro views over a cold one but I don't pretend to know whats gonna happen). Anyway, I see headlines now calling for inflation. We have had massive inflation the past 10 years--just not in the real economy--its been in the asset markets. If my economic degree is of any use, the way I remember the economy working was the central banks cut interest rates and gives cheap credit to producers and consumers. The producers build stuff and hire workers/consumers. The consumers then spend their income in the real economy and the economy grows which then lifts the asset markets. But what appears to have happened is the cheap credit started 10 years ago did not go into the real economy--it went into the asset markets. The rise in the asset markets has given a wealth effect as 401ks, IRAs, trading accounts, real estate are all up, at least from what I read. The hope is that wealth effect then goes back into the real economy as people feel richer now because their S&P index fund is way up. I know there are a lot of perma bears calling for a major market top. I hope they're wrong as the consequences will be devastating. Anyone feel free to rip my analysis apart.

BTC-3420. Well, the 10-day average daily range is at 60 now and dropping daily. This is the level it hit last year before stabilizing around 70+ for a month up until BTC broke 6k. The best action for BTC now is to break lower--stopping out the longs, getting everyone short and calling for $1500 or event 0 as price targets. I don't know what the ultimate low could be but BTC needs a shake out here to attract interest and get the market participating.