Sunday, July 5, 2009
This top chart shows the most appropriate Andrews' Pitchfork. This bottom trend line is the line to break. We will most likely bounce off it one more time.
I expect a correction on Monday, and then another sharp decline to 876 area. Since it is a wave ii correction there is a possibility that the market could retrace 61.8% to the 920 area, but I doubt it will. The M60 Ichimoku Chart shows resistance at 910 to 920. The momentum appears strong and therefore I'm not expecting much from wave ii.
Tenkan-sen has crossed below Kijun-sen, and if the Kumo is violated it will offer no resistance until the 850-860 area. Please notice that the Daily chart rarely flirts back and forth. This is a major cross over, and all the other time periods are supporting a bear market. I just don't see this turning back right now. Even though we dropped sharply on Thursday the market does not appear to be grossly oversold. In fact the price on many time periods is just below the Kumo.
Once wave ii corrects this should gain momentum. We will have to watch the waves in order to find a bottom, but for now it looks like the bears are in charge.
EUR/USD has a lot of cloud cover and bearish Tenkan-sen/ Kijun-sen crossovers to deal with. At the moment it is attempting the make an advance but once it starts to fall I see the next level of support about 200 pips below. This seems to be coordinating nicely with the SPX dropping sharply. As a reference the Euro was at 1.4000 when the NYSE closed on Thursday.
Analysis presented on this blog has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.
Posted by Robert Campbell at 18:43