$FTSE - archetypal negative divergences preceded current correction

Tracking risk appetite across bipolar asset markets

THURSDAY APRIL 4, 2013       16:30:00 GMT

The FTSE 100 closed today's session (April 4th) with a 1.2% loss and more or less on its low for the day. The daily chart reveals two archetypal negative divergences as revealed in the bottom two segments of the graphic. While price continued its climb throughout February, the arrows on both the MACD and RSI chart were sloping downwards indicating a lack of momentum and conviction behind the move to highs not seen since 2007.

[Click graphic to enlarge ]

Today's close violated the 50 day EMA (red line on chart) and while there is evidence of support around 6300 from the top of the cloud formation and the lower BB band, a feasible medium target would be an eventual test of the base of the cloud in the vicinity of 6140.

$EURGBP - valid medium term target is ~ 0.8

Tracking risk appetite across bipolar asset markets

MONDAY APRIL 1, 2013       13:40:00 GMT

Using some very simple TA metrics the current formation on $EURGBP suggests that if vital support around current levels is broken, the distance down from the top (indicated by the upper limit of the top arrow) when projected down from a violated neckline would bring us down towards (and perhaps just beyond) the 0.8 level.

[Click the graphic to enlarge]

This would be a feasible target during the next three to six months.

Reader review for Systemic Risk and Bipolar Markets

Tracking risk appetite across bipolar asset markets

MONDAY APRIL 1, 2013       10:40:00 GMT

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