Inter-market Technical Analysis using algorithmic pattern detection
FRIDAY MARCH 11, 2011 12:20:00 GMT
The massive earthquake in Japan and all of the associated tragedy and mayhem is causing shock waves across global asset classes.
The focus today will be more on showing several charts that have been discussed here recently rather than on making specific recommendations for the next few sessions. There are too many wild cards - not least ongoing woes in the EZ - that make me cautious about reading the technical patterns.
The S&P 500 futures have broken below the channel discussed here recently and at present seem to have found support in the 1280 region - which, if broken, would open a trap door to lower prices in the 1240 region.
AUD/JPY has been one of the largest movers so far in the FX market as the Japanese currency has surged.
The FTSE in the UK is in retreat along with most global indices and here again is a comment from earlier in the week
I shall repeat my view from the Daily Form commentary from February 22 nd - which can be found here - that the FTSE 100 index in the UK seems likely to retreat towards the 5800 level.
In particular the highlighted candlestick from January 31st with an intraday low of 5815 would seem to be a feasible target in coming sessions.
The Mumbai Sensex bounced off the 18000 level again today during Asian trading following the Japanese quake.
The risk apparent on the chart is that the 50 EMA is now approaching a potential "death cross" of the 200 day EMA.
TRADE OPPORTUNITIES/SETUPS FOR FRIDAY MARCH 11, 2011
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
EUR/USD is poised at a key uptrend line on the daily chart.
Germany's DAX has dropped towards the base of the cloud formation in today's trading so far in Europe.
FEZ DJ Euro STOXX 50 ETF
In Tuesday's Daily Form, which can be found here the following comments were made regarding FEZ which tracks the EuroStoxx 50.
FEZ, is the exchange traded SPDR for the EURO STOXX 50 index which includes a relatively large allocation (almost 25%) to large European financial services companies including major European banks.
While the index itself does not have a huge following, and the volume in the ETF averages only about 50,000 shares per day, the price action and volume performance of the sector fund do provide insight into the general appetite for large cap European equities.
The concern with the current pattern is that the index has been stalling in a plateau formation which is now beginning to roll over with clear negative divergence in the MFI chart segment.
ILF iShares S and P Latin America 40 Index
Here are my comments from the Daily Form commentary from February 3rd
ILF is an exchange traded fund which tracks major Latin American equities, and the heavy red volume bars which have been highlighted raise the specter that there could be further weakness ahead for Latin American markets.
OIH Oil Services HOLDRS
This comment was made in yesterday's commentary - and also applies to XES shown below.
OIH, along with some other exchange traded funds in the energy related sectors, is revealing negative MFI divergences.
XSD SPDR Semiconductor ETF
Here again is the thread which began on March 2nd regarding the semiconductor fund, XSD
Last week- and the link to the commentary can be found here, the suggestion was made that XSD, one of the two main ETF's for the semiconductor sector appeared to be ready to roll over and yesterday's 2.4% drop, along with the weak MFI and RSI readings could eventually trigger a fall to the $55 level at the base of the cloud formation.
XES Oil and Gas Equipment Services ETF
XES, an exchange traded fund for the Oil and Gas Equipment Sector, was another major casualty in yesterday's session.