Jan 25am, FX/S&P/BTC Commentary
Euro-1.1350. The Euro just isn't ready to break 1.1300 yet. When it sold off yesterday and broke 1.1300 briefly, the days range was at 128% of the 10-day average daily range and it was NYK afternoon so the conditions just were not there for follow through on the downside--in fact, it was a great fade. You can see on the daily bar chart on the left, a number of moves below 1.1300 going back to early November that were quickly rejected suggesting strong buying interest below 1.1300. For a break of 1.1300 to be sustainable, the market conditions need to be right so that the selling pressure is too much for the buyers to absorb. For today, at current levels, the Euro is above yesterdays and today's mid giving a bullish bias at the moment. The day's range is 72% of the 10-day average daily range so there is room to move. Good resistance lies at 1.1374 which is R1 and then 1.1423 which is R2. Support comes in at 1.1340, 29 and then 20. Today is Friday and the market tends to trend right into the NYK close so there should be a good day trade set up. Wait to see how the 950 to 1050am period trades versus the 920 to 950am period. In the bigger picture, I am still bearish but for today, wait for the direction to confirm and hold into the close. $YEN. The right hand chart is the 10x30 point and figure chart. The white horizontal line is at 110. You can see going back to July how important it is as it's a very low volume trading level. $Yen is bumping right up against it at the moment and my opinion it will break and we will see a move to 112. Support comes in at 109. Any sell off ahead 110 should be shallow and short lied, holding 109. EurJpy has similar picture as $Yen with the 125 level. That level should break as well and be followed by a quick move to 126 and then makes it's way to 128. I'd like to see both break at the same time as one without the other may be a head fake--like $Dem and $Chf back in the day.
S&P-2650. Nothing new to say here. Support between 2630 and 2600 is holding. Can stay long from that range with stops at 2580 or just below. A sideways corrective pattern is the most bullish in here. Markets don't go in straight lines--there is always corrective price action so I find it funny that after such a strong rally and the market sells off some, commentaries start say the top is in and we're going right back down. Maybe they're right, and the top is in but only below 2580 would temporarily negate my bullish bias and suggest a deeper correction to 2500 or so. Resistance lies at 2670/80 but the next leg higher should see 2750.
BTC-3540. Sigh. I guess the 3 handle is the new 6 handle. Waffling around these levels negated any bullish technical picture and now it suggests sideways price action with the odds of a break of either side at 50/50. BTC needs to break 4200 to turn the technical picture bullish again. Support comes in at 3300 but we could easily see a break below 3k now.