Inter-market Technical Analysis using algorithmic pattern detection
WEDNESDAY DECEMBER 2, 2009 06:08 ET
Equities would appear to have regained their composure after flight to safety concerns last week about the Dubai debacle have eased. The hiking again of short term rates by the Australian central bank, the announcement that the BOJ is planning to add new layers of QE in yet another bid to counter deflationary forces in Japan, had ripple effects throughout the currency markets with the net outcome that dollar selling has resumed with a new enthusiasm.
QQQQ registered a modest shooting star formation in yesterday’s session on average volume and as attention shifts towards the Non Farm payrolls number on Friday it would not be surprising to see some cautious trading in today’s and tomorrow’s session.
The Rogers Commodity Index has recovered ground along with equities and again was helped by the ailing dollar. The exchange traded fund which tracks this index, RJI, registered a rather striking shooting star candlestick in yesterday’s session which diverged from the actual pattern seen on the index itself.
Sterling is seeing a firm bid in European trading on Wednesday morning and the cross rate with the euro has come back to a level of previous support/resistance.
The UK’s pre-Budget report, which will be delivered next week by Chancellor Darling, is likely to have some rather nasty numbers in it (some of which will have already been priced into sterling) but I would treat any substantial run-up in sterling against the dollar which outpaces the euro/dollar rate as an opportunity to re-enter a long EUR/GBP trade in coming sessions.
TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY DECEMBER 2, 2009
The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions.
None of these setups should be seen as specifically opportune for the current trading session.
For a more comprehensive listing of price formations detected by our pattern recognition algorithms please visit TradeWithForm
LSTR Landstar System Inc.
Landstar Systems (LSTR) has registered two doji/shooting star patterns recently indicating strong overhead resistance above the $38 level.
NE Noble Corporation
Noble Corporation (NE) has a bear flag formation and registered a small doji star at the 50 day EMA level.
TRA Terra Industries Inc.
Terra Industries (TRA) has the qualifying characteristics of a bull flag pattern.
GENZ Genzyme Corporation
Genzyme (GENZ) is within a bearish pullback formation, which could have further to run, but the pattern should be monitored in coming sessions for entry opportunities on the short side.