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Tuesday, February 14, 2012

Charts I'm Watching: February 14, 2012

UPDATE:  1:25 PM

VIX is coming to life, again.  We had a breakout of the small falling wedge inside the large falling wedge, then a breakout of the large falling wedge itself.  It was followed by a successful back test.

A rise to 21.13 or so will complete an Inverse Head & Shoulder pattern that targets 25+.

A corresponding drop in SPX to 1339 will complete the bearish (for stocks) H&S pattern there.

UPDATE:  12:40 PM

For anyone following the USDJPY, we've seen a pretty strong move today - rising above the SMA 200.  But, a genuine break out will take some doing.  On a log scale, the purple TL/channel guiding prices since 2007 is still intact.   Most troubling for the bullish case is the RSI, which looks to be tagging a TL that's not been very accommodative.

Look for a rise through the purple TL, currently 78.54.   A rise above the Oct 31 high of 79.52 would constitute a more bullish wave form.

And, just for grins...

UPDATE:  10:15 AM

AAPL taking a pause right at the 2.24 Fib level we talked about over the weekend.  Note that 2.24 is an acceptable Crab target (1.618, 2.24, 2.618, etc.)  This also intersects with the trend line from 1994 we discussed over the weekend [see: More Crabapples].

Anyone playing the downside from here, however, would be well advised to place prudent stops; the next significant Fib level is way up at 529.

UPDATE:  9:15 AM

Eminis flashing -5 at this time.  SPX will need to trade below 1339 (10 SMA) to confirm the change in momentum and complete the first Head & Shoulders pattern, while 1343 would take prices below the rising wedge.  


EURUSD has broken down from the rising wedge it's been tracing out (since the first of the year) and completed a successful back test.   It bounced off the SMA 20 last night, having broken through the SMA 10 yesterday.  Further, the EMA 3 crossed below the SMA 10 with the rising wedge break.

I always label my moving averages the same -- just to make it easier to keep track of them on busy charts:
3 EMA:  yellow
10 SMA:  red
20 SMA: white
50 SMA: blue
200 SMA:  thicker red

More later.


  1. Pebble,

    USDJPY is breaking out. I think the chart pattern of this pair is clearer than EURUSD.

    USD going up should exert selling pressure on stocks.

  2. Could be.  Clean break through the 200 SMA.  It broke the TL on the arith scale, but still inside the log scale TL.  I'd prefer to see a breakout above 78.55 or so before getting bullish on this pair.  Topping 79.52 (10/31 high) would be nice from a wave standpoint.

  3. Wow look at that firework at the last 15 minutes. The bulls are taunting their power, and remindng each other that the market simply will not go down....but at least the market is not boring jow, look at the round trip of VIX. PW, today we broke 1343.27, is it going to be the beginning of more downside, or we are looking at one last ramp up?

  4. ES went vertical just now to 1357, making new high. I guess all is well....