Daily Form December 21, 2010


Inter-market Technical Analysis using algorithmic pattern detection


TUESDAY DECEMBER 21, 2010       11:54:00 GMT




Sterling is sliding during European trading on Tuesday morning after abysmal data was published on the Public Sector Net Cash Requirement or PSNCR. The data revealed that the gap between tax collected and expenditures on public services widened at a rather alarming rate and, contrary to expectations that it should be stable or even contract. The gap amounted to almost £23 bn (or $35 billion) and calls into question the more optimistic notions that the UK coalition government had "sorted" the deterioration in the public finances.

The gap might even require the Chancellor to engage in some "comforting" pep talks with the folks at the major CRA’s.

As can be seen on the hourly chart there is a real possibility that sterling could take out recent support at $1.5460 and after that there is scope for further downside to $1.5350 at least.

This will be my last commentary for 2010 and I would like to extend very best wishes to each and all for the upcoming holiday and for peace and prosperity in 2011.



At the end of last year I published some predictions about the possible direction of numerous asset classes during 2010. Just to focus on the key ones, I was pretty much on the money about the euro and gold, too pessimistic about sterling and interestingly both right and wrong about the S&P 500. I predicted a range for the year between 870 (not seen of course) but with an upside of 1280 (but tended to the view that this would be seen mid year rather than at the end of the year).

I would not be surprised to see the S&P 500 continue to eke out gains between now and the last trading day of this year and perhaps come close to the 1280 level. However I would also not be surprised to see a rather abrupt correction in early January as well.

The Nasdaq 100 continues to display candlestick patterns which are symptomatic of a rolling top formation, and if the view on the S&P 500 is correct then the Nasdaq 100 could be in the vanguard of a late year advance but also leading the charge (should there be one) in a sharp correction during the first few sessions of 2011.



The Bovespa Index in Brazil is still in the vicinity of its 200 day EMA after violating an uptrend line, and I shall be monitoring this index closely for clues about direction in a number of emerging markets in general - some of which are also covered in the discussion below.



EUR/USD is moving at a snail’s pace in current trading and the near term direction is hard to call. Longer term the outlook for Q1, 2011 from both a technical and fundamental perspective is not favorable.
Here are some noteworthy comments to be found in a column today by Ambrose Evans Pritchard, from the Telegraph, under an article entitled Pimco says ’untenable' policies will lead to eurozone break-up

Andrew Bosomworth, head of Pimco’s portfolio management in Europe, said current policies are untenable in the absence of fiscal union and will lead to a break-up of the euro.

"Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments," he told German newspaper Die Welt.

He said these countries could rejoin EMU "after an appropriate debt restructuring", adding that devaluation would let them export their way back to health.

Mr Bosomworth said EU leaders were too quick to congratulate themselves on saving the euro last week with a deal for a permanent bail-out fund from 2013.

"The euro crisis is not over by a long shot. Market tensions will continue into 2011. The mechanism comes far too late," he said.

"Can countries inside a fixed exchange-rate system like the euro grow and tighten budget policy at the same time? I don’t think so. It didn’t work in Argentina," Mr Bosomworth said.








TRADE OPPORTUNITIES/SETUPS FOR TUESDAY DECEMBER 21, 2010


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





IDX  Market Vectors Indonesia ETF  

Here again are comments from last week


IDX, which tracks Indonesian equities, after registering a series of lower highs may be headed for a test of the base of the cloud formation and even further towards the 200 day EMA which also coincides with a support level on the daily chart.

There appears to be a gradual attrition in several of the newer emerging markets and in line with my comments about the Brazilian index it may be that a process of capital withdrawal from these high flying markets is under way.




THD  iShares MSCI Thailand Invest Mkt Index  

THD, which tracks the MSCI index for Thailand, is also part of the story alluded to above.




PGJ  PowerShares Gldn Dragon Halter USX China  

PGJ, an exchange traded fund for a select group of Chinese equities, has retreated to a zone where buying interest should be expected to emerge. As stated in regard to the previously mentioned geographical sector funds, should there be a lack of interest at current levels for PGJ, this would suggest that EM asset classes may not be the focus of capital allocation decisions as we enter the New Year.



Daily Form December 20, 2010


Inter-market Technical Analysis using algorithmic pattern detection


MONDAY DECEMBER 20, 2010       12:30:00 GMT




The S&P 500 futures (e Mini March contract) look poised to break above resistance at 1242 on the hourly chart indicated below.
The DAX is currently registering a new multi-year high above 7050, and the CAC 40 has made a remarkable recent reversal from its plunge below 3600 in late November and is currently trading above 3900.
Thin markets seem to be favoring the bulls and with plenty of accommodative policy from central banks in the "mature" economies, and with many taking the view that one can apply a linear weighting system of pluses and minuses to the various major factors, such as better economic statistics in the US on the one hand versus more serious problems in the EZ than anticipated (not to be revealed in gory detail again until euro bond markets "re-open" for business in January), there is "on-balance" a positive outlook for equities which should keep markets rising for some time yet.
As alluded to the real problem is that one cannot really run such a simplistic balance sheet analysis using "linear" weightings, and only when the non-linear dynamics of debt contagion re-surface - which I expect them to do during Q1, 2011 - will the fallacy of this kind of back of the envelope weighing of the fundamentals become apparent.
But in this season of good cheer and happy times let’s not dwell too much on such awkward matters.



As anticipated here last week EUR/CHF is taking another leg down and the daily chart below- which includes pricing on Monday at noon European time - shows the euro at an historic low against the Swiss Franc.
Lots of wealth seems to be escaping the euro and shifting into the safe havens of Swiss banks and the Swiss currency.



The hourly chart for EUR/USD with a superimposed fibonacci grid highlights the significance of the $1.3175 level as it sits at the 38% retracement level of the high/low seen on the chart.

If we can regain ground above this level, then just for today’s session I would be looking for a re-test of the $1.3280 level. If, on the other hand, the recent intraday low of $1.3120 is taken out then one suspects that the next target for the bears will be $1.30.



Sometimes when taking a big picture perspective with FX trading it is advisable to look at the longer term weekly charts. With this in mind with respect to AUD/USD, the risk reward calculus would keep me cautious of playing the long side of the Aussie dollar, on anything but an opportunistic and intraday time horizon, in coming sessions.






TRADE OPPORTUNITIES/SETUPS FOR MONDAY DECEMBER 20, 2010


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





TUR  iShares MSCI Turkey Investable Market Index Fund  

TUR, which tracks Turkish equities, has reached a level where a bounce should be expected.




EWP  iShares MSCI Spain Index  

EWP, an exchange traded fund for Spanish equities, remains relatively unattractive with respect to other opportunities in equities in different geographical regions.




EWI  iShares MSCI Italy Index  

Somewhat in accordance with the issue of sovereign risks for Spain, which I would expect to become urgent again in early 2011, one can also add the growing political risks in Italy and this is why EWI, an exchange traded fund which tracks the MSCI Italy Index, also looks unattractive longer term.



Daily Form December 17, 2010


Inter-market Technical Analysis using algorithmic pattern detection


FRIDAY DECEMBER 17, 2010       12:23:00 GMT




Quite frequently there is a strong fit between the Ichimoku formation and the fibonacci retracement grid and this is well exemplified on the hourly chart below for EUR/USD.

The euro is currently headed towards a test of the base of the cloud around $1.3255 which also corresponds rather well with the 23.6% retracement of the recent high/low after price was notably rejected literally at the top of the cloud which was just above the 50% retracement level.

As noted here recently $1.3175 is a key level to watch and a break below that could well see a re-test of the $1.30 level.



In yesterday’s column I commented that the Brazilian Bovespa index is sitting rather precariously at a key support level. Following yesterday’s close below the uptrend line there is another test at the 200 day EMA (green line on chart) and 64,000 would seem to a longer term target if further corrective behavior unfolds.



A couple of weeks ago I was targeting the base of the cloud formation for the Hang Seng Index which actually occurred in Thursday’s session. It will be quite important in assessing overall risk appetite to see whether the pause at the base of the cloud could be the beginning of a recovery phase or whether the index will continue lower with 22,000 being the next obvious downside target which coincides with the 200 day EMA.



The Nasdaq 100 registered an inside pattern following yesterday’s action and I would repeat my comment from earlier this week that there is a possible double top pattern evolving as the current level is almost exactly the multi-year high achieved in November 2007.






TRADE OPPORTUNITIES/SETUPS FOR FRIDAY DECEMBER 17, 2010


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





MYL  Mylan Laboratories Inc.  

Mylan Laboratories (MYL) has continued to exhibit the bullish price development which was anticipated here twice in the last few weeks.




PCY  PowerShares Emerging Mkts Sovereign Debt  

Although I exited PCY, the fund which tracks returns available on emerging market sovereign debts, some time ago with considerable profit, I should have been more patient and waited until the 200 day EMA was reached --- which now looks feasible in coming sessions.




SPLS  Staples Inc.  

Here is a comment from Daily Form on December 10th


Staples (SPLS) reveals the early stages of a cup/handle pattern at a key level and also as the 50 day EMA is seen crossing the 200 day EMA from below following yesterday's session I would be inclined to look for long entry points during the next couple of sessions.




Daily Form December 16, 2010


Inter-market Technical Analysis using algorithmic pattern detection


THURSDAY DECEMBER 16, 2010       12:10:00 GMT




Yields across the UST spectrum are maintaining their upward momentum and the yield on the 30 year bond closed at 4.6% which has also had the affect of pushing mortgage rates in the US back above 5% which may be just one of the unintended consequences of QE2.

As can be seen on the chart the 4.8% level may act as a target/attractor in the near term.



The Brazilian Bovespa index is sitting rather precariously at a key support level.



The German DAX has been one of the best performing equity indices in Europe and as can be seen on the longer term weekly chart the index has a 78.6% target at 7150. However the ETF which tracks the MSCI Germany Index (see below) does look as though it may be in the early stages of a correction.



Investment grade corporate bonds, as tracked by LQD, have fallen below the 200 day EMA.






TRADE OPPORTUNITIES/SETUPS FOR THURSDAY DECEMBER 16, 2010


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





EWG  iShares MSCI Germany Index  

EWG, an exchange traded fund which tracks the MSCI Germany Index will be worth monitoring for validation that the recent lower top might be the precursor to consolidation/correction.




IDX  Market Vectors Indonesia ETF  

IDX, which tracks Indonesian equities, after registering a series of lower highs may be headed for a test of the base of the cloud formation and even further towards the 200 day EMA which also coincides with a support level on the daily chart.




EWZ  iShares MSCI Brazil Index  

The chart for EWZ, which tracks the MSCI Brazil Index, may also be headed for a testing of the 200 day EMA



Daily Form December 15, 2010


Inter-market Technical Analysis using algorithmic pattern detection


WEDNESDAY DECEMBER 15, 2010       12:46:00 GMT




Monday’s commentary included a discussion of the rather troublesome deterioration in the Spanish government bond market, and this has proven to be somewhat timely as Moody’s has today announced that it has put Spain on credit watch with a possible downgrade ahead. This has been accompanied throughout the Wednesday morning session in Europe with the usual denials that there is any risk of Spain needing assistance, intermingled with various suggestions from EZ officials that they are preparing to enlarge the various bail out mechanisms.

The weekly chart of the Nasdaq 100 index shows that the index has now closed at almost exactly the level from November 2007 and raises the prospect that a double top pattern - at least from an interim perspective - could unfold. Meanwhile, as noted here many times recently, US equities continue, with the support of vast amounts of POMO, to blithely ignore many kinds of potential contagion risk from the partly insolvent EZ, the muni bond market meltdown, rising inflation and a sell off in all kinds of bonds.

Such resilience is hard to challenge and one could put it down to a combination of both the wisdom of not fighting the Fed, and to the fact that all of the money which is now exiting fixed income asset funds is looking for more adventurous opportunities in equities.

While I am still expecting higher equity prices ahead in 2011 - until and unless the EZ disintegrates - the near term risks of a sharp correction are rising and to that extent I remain flat on exposure to US equities.



In Monday’s commentary I suggested that the pattern on the EUR/USD hourly chart pointed to a descending wedge pattern which I thought would break to the downside. I also attached a relatively low probability to the fact that if the wedge was broken to the upside that we would go back and retest the $1.3480 level.

As it turns out my less probable scenario unfolded yesterday in exactly that fashion, and once I had lost enough by shorting rallies, and became convinced that the euro would head back to the most recent highs, I was able to gain more profits than I had lost earlier in the day. This shows that one needs to be prepared to abandon strategies quickly in trading FX, especially when - as with wedge/triangle patterns - the break aways become firmly directional.

The daily chart for EUR/CHF below shows that the euro faces a key test of the lows against the Swiss franc, and while a near term bounce is likely the amount of capital flows into the Swiss currency from anxious European investors and institutions suggests that another leg down is a distinct possibility.

When large scale bond trading resumes in the new year I would expect the increasing difficulties for the EZ to re-emerge with a vengeance and if the problems of Spain take center stage the manner in which this much larger economy than Greece, Ireland or Portugal can be rescued will become a massive headache for EZ policy makers.



GBPUSD has been selling off abruptly on Wednesday morning in European trading and there is a growing sense that the UK’s Bank of England may find itself snookered over short term rates and any further QE as the CPI index is rising at a 3.4% annualized rate. The broader measure of inflation, and many would argue more realistic for typical consumers, the RPI rate (Retail Price Index) looks to be headed to 5% in 2011.

It is now becoming a definite policy conundrum for the B of E as to how long it can prop up the property market with ZIRP and the accompanying beneficial flow through to base rate tracker mortgages, while running the risk that, once out of the bottle, it is very hard to get the inflation genie back inside again.

Should sterling fail to find support around the levels seen on the 240 minute chart below, i.e. at the base of the cloud, then $1.5480 becomes a feasible near term target.



Despite major selling of the dollar during the early part of trading yesterday the 240 minute chart for USD/JPY still reveals that a key uptrend line has not been violated.

Although I would expect trading conditions to become even more volatile over coming sessions, I am sticking with my target of a move towards 85.90 before the end of the year as long as the uptrend line on the chart remains intact.






TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY DECEMBER 15, 2010


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





MUB  iShares S&P National AMT-Free Muni Bonds  

The chart for MUB reveals the dramatic drop in the market's appetite for municipal debt within the US and the appropriate posture would be one of seeing any rallies as selling opportunities.




CMF  iShares S and P California Municipal Bond  

Readers will recall that I have been bearish for a long time on CMF, the exchange traded fund which tracks California's municipal debt, and as with MUB this chart seems to have the remarkable capacity to keep seeking out lower prices.




EWP  iShares MSCI Spain Index  

EWP, an exchange traded fund for Spanish equities, looks vulnerable technically and the potential downgrade for Spanish sovereign debt will not be constructive for this market.




MYL  Mylan Laboratories Inc.  

Here is my comment from a recent column


Mylan Laboratories (MYL) has a combination of bull flag characteristics as well as a cup/handle formation and the long side would be appealing from a reward/risk perspective.





IEF  iShares Lehman 7-10 Year Treasury  

IEF, an exchange traded fund which allows access to prices of UST's in the 7-10 year maturity range has been tumbling in line with the ongoing uptick in yields on this spectrum of the Treasury complex.

My intuition is that the selling in this part of the yield curve may be reaching a climax and that more sustained damage may now be found at the longer end of the curve, especially the 10/30 year bonds. A long position in IEF and a short position in EDV would be worthy of consideration.



Daily Form December 13, 2010


Inter-market Technical Analysis using algorithmic pattern detection


MONDAY DECEMBER 13, 2010       09:37:00 GMT




Some of the chart formats today will be slightly unorthodox so that I can incorporate a different perspective on some key asset classes which I will be presenting later today on a pre-recorded television slot which will be broadcast on Cantos Charts and Reuters Insider.

The first chart is designed to show both the daily closes over the last several months of the Russell 2000 and the S&P 500 situated within their Bollinger Bands. In other words a 50 day simple moving average has been taken for both indices and the standard deviations calculated. The distance from the SMA is indicated by the left hand scale which indicates the number of standard deviations above or below the moving averages.

According to probability theory based on a normal distribution (which is actually seriously flawed in relation to time series data for financial assets - but that’s another story) the likelihood of price being above the level which is two standard deviations (or sigmas) from the average is only about 2.5%. This is because 95% of observations are likely to fall within plus or minus two standard deviations, and since this is symmetrical at both ends of the scaling the probability of being above 2 sigmas is equal to half of five percent.

As can be seen from the chart both indices are now above 2 sigmas and the Russell 2000 (red line) has been for several sessions. The suggestion - especially when looking at previous instances on the chart when this has happened - is that a near term top for both indices is increasingly probable.



The next chart shows two lines with two different vertical axes.

On the left hand vertical axis can be seen the beta value of the Russell 2000 with respect to the S&P 500. Essentially this measures the extent to which changes in the micro cap index tend to amplify the changes in the broader market index...it is not the same as volatility but rather measures the way that the two indices exhibit co-movement. A reading of 1 for beta means that they essentially move in sync with each other whereas a reading of 1.50, for example, would show that for whatever change the S&P 500 reveals - either up or down - the Russell 2000 will show a change of 50% more than that of the broad market benchmark.

On the right hand axis is the S&P 500 plotted according to the Bollinger bands as discussed above. As before it can be seen that the close on Friday put the S&P 500 index above 2 sigmas which has not happened for about a year.

Most importantly the beta value is declining quite rapidly on the right hand side, i.e. most recently, which suggests that the Russell 2000 is currently below its norm in "out-performing" the S&P500. Given that both indices are reaching extreme levels the suggestion is that, when there is a correction, the best strategy would be a pairs trade of equal dollar values with a long component of SPY and a short component of IWM assuming that the beta will increase to more normal levels and the IWM will be "losing faster" than its SPY counterpart.




I have recently focused on the serious problems within the Eurozone and wanted to show two charts which need to be watched in coming weeks relating to the bond spreads for two critical countries which represent potentially large problems for the EZ with systemic implications.

The chart below shows the spread between the 10 year Spanish bond and the equivalent bund (blue line) and the spread between the Portuguese 10 year and the bund (red line).

The problems of Portugal have received a lot of attention from traders in FX and the euro government bond markets, but it is the recent upward moves by the Spanish bond that are more concerning. Last week the Spanish 10 year was yielding more than 5.5% - and almost touched a 300 bps spread against the bund. The suggestion is that the Spanish/German spread will be very much in focus, especially when the main bond market trading desks re-open for normal business in 2011.



The chart below reveals the spread in basis points between the Spanish ten year government benchmark bond and the Portuguese equivalent.

The spread needs to be considered in relation to the previous chart as in itself it is relatively uninformative. They key takeaway is that if both Spanish and Portuguese bonds are rising with respect to the underlying EZ benchmark rate which is effectively the yield on the ten year German bund, and the spread between the Spanish and Portuguese bonds is narrowing (declining) then the perceived creditworthiness of Spain within the EZ is deteriorating.

As previously discussed, while the markets may have already discounted a bail out for Portugal the EFSF system is not equipped to handle a bail out for Spain and the ramifications for the euro currency and the already fragile euro bond markets would be quite staggering if Spain needs to be rescued...indeed it is unclear exactly how that could be accomplished.






TRADE OPPORTUNITIES/SETUPS FOR MONDAY DECEMBER 13, 2010


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





USDJPY    

USD/JPY has cleared above cloud resistance on the daily chart and the basing pattern revealed suggests that an initial target of 85.80 is feasible, perhaps before the end of 2010, with a longer term target during Q1, 2011 of 89.10.

Needless to say, I believe there are favorable trading opportunities ahead on the long side for most of the yen crosses - in particular CHF/JPY and CAD/JPY.




EURUSD    

EUR/USD on the hourly chart is now showing the characteristics of a descending wedge pattern which could be the precursor to a sell off if and when there is a break below base of the pattern at around $1.3150.

A decisive break above the descending trendline through the highs on this hourly chart, which I deem to be less probable, would suggest a possible attempt to re-visit the $1.3480 level.

Short term scalping with a focus on selling rallies is still the preferred stance for coming sessions.



Daily Form December 10, 2010


Inter-market Technical Analysis using algorithmic pattern detection


FRIDAY DECEMBER 10, 2010       12:22:00 GMT




If the yield on the Five Year Treasury note moves up towards the dotted line of potential resistance indicated on the chart, which more or less coincides with a yield of two percent, this mid spectrum instrument will almost have doubled in just six weeks.
The yield curve is clearly a lot flatter today than it was six weeks ago which is to be expected at this stage in the flight from safety, but in my estimation, if the long term bull market in UST’s is drawing to a close there is likely to be a more steady attrition in price at the longer end of the maturity spectrum as the correction unfolds.



Despite underlying concerns from the sell-off in fixed income assets, the ongoing uncertainties about the situation with respect to the Eurozone and the outlook for inflation problems in Asian markets, US equities are showing remarkable resilience.
Having said that one has to remember that current equity markets in the US are less about price discovery and more about the benefits of POMO.
While it may be ungracious to point this out when everyone seems to be so enamoured with equities, the Nasdaq 100 index is revealing a very pronounced negative divergence from a MACD perspective. However, as could be seen in the extended period of bullishness in late 2007 and even in mid 2008 the market can go a long time exhibiting such symptoms of dissonance before any damage is done. And one has to recall that those periods were without a super generous asset purchase program being administered on almost a daily by those kind folks at the Fed.



EUR/USD is entering the sharp end of a triangular formation with $1.33 as an upward bound and $1.32 as a lower bound.
The clear trend-line through the highs on the right hand side of the chart is causing me to lean towards a drop below the $1.32 level. However, the euro bond markets are closing down for the year and with thinning liquidity in coming weeks in the FX markets there really could be some wild gyrations in the exchange rate, and I am confining my activities to short term trades with a bias towards selling rallies when key Ichimoku levels are touched on the 15 and 30 minute charts and taking profits (or losses when I get the trades wrong!) quite quickly.



I have written an extended piece on the Eurozone’s current crisis and likely future course from my perspective which can be found here .
One of the themes of that piece is to discuss the potential for fall out from further deterioration in the outlook for the German bund. It could well be argued that German government bonds have consistently been the most reliable sovereign credit instrument over the last 20 years (or more). We shall have to see when traders return in 2011 to dealing with dire condition of the EZ’s peripheral public finances just how much the fact that Germany’s credit standing, being the principal underwriter of the EZ safety net, may become tainted by the inferior credits of most of its fellow EZ members.

Meanwhile the DAX index is racing ahead again, and stands above 7000 in European trading on Friday morning as this is being written, so once again it feels a little grumpy to be pointing to the discordant formation on the MACD segment below.






TRADE OPPORTUNITIES/SETUPS FOR FRIDAY DECEMBER 10, 2010


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





USDJPY    

USD/JPY has cleared above cloud resistance on the daily chart and the basing pattern revealed suggests that an intermediate term target of 85.80 is feasible.




LQD  iShares iBoxx Invest Grade Corp Bond  

I last commented on LQD, a fund for investment grade corporates, and noted the drop below the cloud formation. Following the pullback and failure to re-enter the cloud the fund has dropped in line with the correction now being seen in most fixed income instruments.
While I would still favor the short side, the proximity to the 200 day EMA to yesterday's close could see a small respite from the selling, but the trading stance towards the numerous fixed income ETF's (some of which track yield and can be purchased as longs or if they represent price they should be shorted) is moving now to one of selling any rallies in the price of most bonds.




MUB  iShares S&P National AMT-Free Muni Bonds  

The chart for MUB reveals the dramatic drop in the market's appetite for municipal debt within the US and although the chart pattern suggests that a bounce off a double bottom may be likely in the near term, as just suggested in connection with LQD, the appropriate posture would be one of seeing rallies as selling opportunities.




SPLS  Staples Inc.  

Staples (SPLS) reveals the early stages of a cup/handle pattern at a key level and also as the 50 day EMA is seen crossing the 200 day EMA from below following yesterday's session I would be inclined to look for long entry points during the next couple of sessions.