Macro Daily Form March 29, 2011

Inter-market Technical Analysis using algorithmic pattern detection

TUESDAY MARCH 29, 2011       11:04:00 GMT

The Nikkei 225 has entered a holding pattern registering relatively minor moves in contrast to the much more dramatic moves following on from the tragic events which began on March 11th and which, to some extent, are still unfolding in Japan.

As can be seen from the fibonacci grid the current price has stalled at the 50% retracement level of the entire move down from the most recent peak to the panic low of 8227 seen in trading on March 15th

There is a level of notable chart support around the 9200 level, but in order to get bullish on the longer term prospects for the index one would want to see a break above the 62% retracement level of 9872.

The S&P 500 futures (June e-Mini) contract - is showing a negative tone in European trading on Tuesday morning and threatening to break below an uptrend line which is visible on the 240 minute chart.

The 1298 level is a rather key level in today’s sessions and if that was to be taken out on a closing basis then I would look for an eventual re-test of the 1275 level which can be seen at the base of the salmon colored cloud formation on the right hand side of the chart.

EUR/JPY is approaching the top of a well defined range or channel on its daily chart which has prevailed for more than a year

The critical level is 116 and a break above that level would open up a move to the 120 level which is indicated as the target level of the weekly Ichimoku chart pattern.

Last week I drew attention to the bullish flag pattern on the chart for the exchange traded fund TAN which provides exposure (please forgive the pun) to the solar energy sector. As it turned out the flag morphed more into a pennant but yesterday’s action saw a strong gap upwards move.

The only reservation about a continuation of this move is the relatively light volume and the long upper tail to the candlestick pattern. Taking profits on half of the position would be recommended with a trailing stop on the remainder.