Daily Form August 23, 2010

Inter-market Technical Analysis using algorithmic pattern detection

MONDAY AUGUST 23, 2010       10:08:00 GMT

Equity markets appear to be hanging on by their finger tips to fairly critical levels. No where is this more true than in Japan where the Nikkei came within 90 points of the key 9000 level in Monday’s trading.
The index closed at its lowest level since last November and I will repeat my comment from Friday’s newsletter that a clear break below 9000 could be a watershed event for global risk appetites

I am still of the view, despite the intriguing hammer formation on the chart from Friday’s session, that the Russell 2000 looks vulnerable to a test of the 585 level.

EUR/USD is trading below $1.27 in European trading and on the daily chart has now entered the cloud formation. The annotated break of a key trend-line suggests an eventual testing of the base of the cloud formation which means we could see $1.2450 in coming sessions.

I shall be looking for suitable entry levels on the short side of AUD/CHF in today’s trading. The chart suggests that there is a relatively attractive longer term position play by selling the Aussie dollar against the Swiss franc on any significant rallies of AUD.


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

XOP  SPDR Oil and Gas Exploration  

Here again is my comment on XOP from Friday's commentary

XOP, the exchange traded fund for the oil and gas exploration sector, has dropped below the cloud formation and other technical weakness suggests lower prices ahead.

For premium subscribers there is a daily listing of key ETF's and equities which have made significant moves in relation to many key technical indicators, including those which have dropped out of Ichimoku cloud formations or emerged from such clouds in an upward direction. Notably at the moment there are very few instruments which are emerging upwards from such clouds apart from inverse ETF's.

IDX  Market Vectors Indonesia ETF  

IDX should be monitored for evidence of a third lower high.

IXN  iShares S and P Global Technology  

IXN, a sector fund which tracks global technology stocks may struggle to regain a footing within the cloud formation and will be on my watch list for this week for a possible drop down back to the early July level indicated on the chart.