Daily Form May 14, 2010

Inter-market Technical Analysis using algorithmic pattern detection

FRIDAY MAY 14, 2010       04:02 ET

The 240 minute chart for the S&P 500 June e-mini futures contract shows a triangular pattern with a potential violation yesterday, which if confirmed today, could see a test of the 1130 level as indicated by the arrow.

As was the case on May 6th, AUD/JPY was highly correlated in yesterday’s movements with the late decline in US equities. Also visible on the 4 hour chart is the possibility of a correlated retreat with the S&P 500 towards 82.40
This currency pair is worth monitoring on a daily basis and the longer term chart suggests that a topping process appears to be under way.

Here are my comments from yesterday on sterling

$GBPUSD looks vulnerable to a re-test of the $1.45 level seen last week.

In overnight Asian and early European trading we have seen a $1.4540 print and this could well be subject to further downward testing today.
It would not be surprising to see some consolidation in the current area but longer term there still remains potential for further downside into the low $1.40’s

As anticipated yesterday EUR/GBP was ready for a significant move and as anticipated it was up as sterling weakened against the euro. Reviewing the chart below, I would not count on further strength in EUR/GBP in the near term as the cloud formation suggests resistance at 0.8620


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


USD/CHF was a focus currency pair earlier this year in these columns where I discussed my view that in broad terms a strengthening of the US currency was to be expected in 2010.
Reviewing the weekly chart, the pair is about to emerge from the weekly cloud formation which validates further bullish action for the US currency. The 61.8% retracement of the swing high/low which is in the vicinity of 1.14 and has been indicated, is a valid intermediate term target.

EAT  Brinker International Inc.  

Brinker (EAT) dropped below the cloud formation on substantial volume and could be vulnerable to a retreat to the level shown on the chart.

HNZ  HJ Heinz Co.  

Heinz (HNZ) registered a gravestone doji candlestick yesterday.