Daily Form September 7, 2010

Inter-market Technical Analysis using algorithmic pattern detection

TUESDAY SEPTEMBER 7, 2010       11:11:00 GMT

The S&P 500 futures have been acting poorly during European trading on Tuesday morning. The 30 minute chart below suggests that a re-visit to the 1090 level may be on today’s agenda when trading resumes in the US following the extended weekend.

AUD/USD has taken a hit on Tuesday after a surprise move (or absence of move) by the RBA on short term rates.
The hourly chart clearly reveals the plateau pattern following the break of the trend line and the manner in which traders were waiting to see what the central bank would do.
The next major line of support is around the .90 level against the US dollar.

I shall repeat my comment from last Friday’s letter regarding the UK’s benchmark index

Reviewing the fibonacci grid on the chart the 5436 level, which also coincides with the bounce level following the sharp move down in early May, appears to be in need of testing in coming sessions.

Having tested the level and closed almost exactly on it in Monday’s session the index is retreating and adding further validation to the notion that, until proven otherwise, this market in harmony with many others is in a fairly easily discernible trading range.

USD/JPY is approaching the recent lows below 84 and attention should be focused today on whether there is triple bottom bounce or more ominously the 83.60 level fails to hold. As always central bank intervention remains a possibility and this will keep me very cautiously confined to playing short term scalping moves at most.


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


Here also is another comment from Friday's column

I am planning to look for pullbacks to increase long exposure on EUR/GBP with an initial target of .8380.

I exited the entire position and am now neutral on this cross rate.

PAAS  Pan American Silver Corp. (USA)  

Pan American Silver (PAAS) managed to break through key levels on strong volume last Friday one would expect in coming sessions, not necessarily today, to see follow through towards the recent top of the range.

IYR  iShares Dow Jones US Real Estate  

IYR, a sector fund which tracks US real estate, registered a tiny doji star/hanging man candlestick from last Friday which could equate to a short term exhaustion top.

CMF  iShares S and P California Municipal Bond  

CMF, the exchange traded fund which tracks California's municipal debt, appears to be entering a correction after Friday's red trend day on substantial volume.