Well yesterday I would say bears 1, bulls 1 – despite the spikes it felt like there might be a few tentative bears sticking their heads above the parapet. These recent rises and bullishness have really kicked the shorter term trend up – check out the 10 day on the Bianca chart below. Its worth zooming out and looking at the EMA’s on the longer time frames though to give you a sense of where this is going, and interesting the EMA’s are levelling off on the 4 hour, and have crossed to bear on the hourly (first bearishness since 2nd August). Safezone on hourly is above actual price. We had a decent close level yesterday, mainly as the market spiked higher just before the divi adjustment to close at 5848. That was people going long to get the divi. We might see that level tested today. Greece’s ratings has been cut again though on a worsening outlook, but having little adverse effect this time – ECB to the rescue so nothing to worry about, any country with any issue, we’ll just print some money and bail you out! that seems to be what is holding this up at the moment following Draghi’s comments a while back when the market was falling.
Most Asian stocks advanced amid speculation central banks will take steps to support economic growth. Japanese 10-year yields climbed to the highest level in one month as oil and metals declined.
The MSCI Asia Pacific (MXAP) Index gained 0.2 percent as of 2:12 p.m. in Tokyo in its third day of gains, rising off three-month highs. Standard & Poor’s 500 Index futures fell 0.2 percent after the underlying gauge closed at the highest level since May 2. Oil dropped 0.5 percent to $93.19 a barrel in New York, while aluminum, zinc and copper in London slid at least 0.6 percent. Japan’s 10-year yields rose three basis points to 0.81 percent, the highest since July 5.
Outlook & Plan
We keep testing and breaking the top of the 20 day channel with this rise which confirms that the rise isn’t driven by technicals but by sentiment and the thought of no matter what, politicians will do whatever is required to cure any ills that crop up. Unfortunately, rather than treat the problem, that just treats the symptoms and that is not good – we are back to the tin can being kicked down the road. I could do on but I will focus instead on what and how I am going to trade today. Today’s pivot is 5822 – pretty certain we will see that but I am still feeling a bit bearish as per yesterday. The 10ema on daily needs to be tested I feel, currently at 5744, my analysis from a few weeks back had 5850 as the target area for the longs, price is trying to break below the 10ema on the 4hour, and the hourly is bearish. Will all that culminate in a trend change? Possibly. Therefore I am going to go short at that pivot area again – 5820, with a stop above the recent highs, so quite wide at 5853. The target is 5744 initially, being the daily 10ema, we do also have support at 5765 as you can see below. I have kept the blue arrows simple today to show the general sentiment I have.