A noteworthy observation after going through my public list is the recent upmove for the Euro. The two recent gaps have created a technical chart pattern which is called ‘Island Reversal’. A price target for the Euro currency that looks rather feasible would be the 1.30 level. The distance between the actual price and the moving average 200 is huge. This increases the odds for price moving back towards the MA 200. The Euro is extremely oversold and the distance towards the long term MA 200 suggests we are facing a situation comparable to a rubber band stretched to the max making a snap back rally very likely.
Up-to-date Euro daily chart on my public list.
The 1.30 price target for the Euro would fit well into the pattern displayed in the weekly chart. The pullback towards the lower trendline could end up being a ‘Kiss of Death’ type of retest before resuming its march lower. It is way too early to tell but something to keep in mind if the Euro is able to move back towards those levels.
Up-to-date Euro weekly chart on my public list.
The Euro strength today obviously lead to US Dollar weakness which usually makes it easier for the market to move up. That’s exactly what we witnessed today. So far my pilot position trades I put on in order to test the market’s resilience, BTN – Ballantyne Strong and ARUN – Aruba Networks, are doing well. The market now looks like it could move higher. There are literally countless fundamental reasons that would make it easy to argue for the markets to keep going lower. This is starting to look like the market is again able to shrug off bad news, simply do its own thing and move up. My job as a trader is to analyze the charts, identify the path of least resistance and position myself accordingly.
In theory, theory and practice are the same. In practice , they are not. – Yogi Berra
My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469
Buenas noches!
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