Daily Form April 22, 2010

Inter-market Technical Analysis using algorithmic pattern detection

THURSDAY APRIL 22, 2010       07:02 ET

Re-assessments of the debt/GDP ratios of the troubled EZ economies, published on Thursday from the European Commission, is causing a ramping up of the CDS rates on sovereign debt for all of the PIIGS countries.
Yesterday I suggested that EUR/GBP was destined to test the January low - that has already been tagged and the next target would appear to be the lows around 0.85 from the summer of 2009.

The sector fund for broker/dealers, IAI, appears to be developing a bearish pullack formation and the current mood of increased focus on bank regulations - including the remarkable proposals from the IMF announced yesterday - suggest that this sector could be facing stronger headwinds in the future than the cheerleaders for the sector have presently discounted.

The 240 minute chart for Germany’s DAX is indicative of a lower high/double top pattern and the bottom of the cloud would be a near term target.

One of the FX charts which caught my attention this morning is the long term monthly chart for EUR/CAD which as can be seen is now at historic lows - reflecting as much the troubled euro as well as the strength of one of the world’s key commodity currencies. No specific action is recommended although short term scalping opportunities could be quite lively.

Readers are advised that TradeWithForm is now offering a premium subscription service which will provide daily alerts to a variety of technical patterns including many based on Ichimoku analysis. You can find out more about the TWF algorithmic pattern analysis by visiting the following link .


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

EWJ  iShares MSCI-Japan  

The Nikkei 225 dropped by 1.2% in Asian trading and the EWJ sector fund looks technically vulnerable from an Ichimoku perspective

BIK  SPDR S and P BRIC 40  

Heavy volume was associated with the 1.6% drop in BIK, one of the ETF's which track the BRIC economies, and the close dropped below the Kijun Sen level. The hammer pattern suggests that there could be room for near term recovery but the chart looks a little heavy with downside targets in the longer term to the $24 level.