Just Like Old Times

Welcome to the old pebblewriter.  If you found your way here, you know that Hostgator -- the outfit who host pebblewriter.com -- is down this morning.  I have no idea when they'll be back up, but I'll post here until they are.  I'm getting status reports here:  https://twitter.com/HGSupport

A reminder, I will wrap up at 2pm today and will be on vacation Monday through Wednesday of next week.  I will post an updated forecast either this evening or tomorrow, assuming the servers are operating again.

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Here's where we are so far this morning...

I shorted on the opening at 1706.10, then went long at 1700.78 with an interim target of 1712 as detailed last week.

I posted several currency charts earlier this morning.  Here are the updated versions:

The dollar, which had poked up above the falling white channel midline in a rising wedge, broke down from the wedge this morning.  While the recent .786 tag could have been a significant bottom for DX, I continue to suspect the .886 at 81.11 is in the cards for Monday Aug 5.

Aug 5 shows up as a potentially significant date in many of my charts, including the USDJPY.  It marks the intersection of two important channels, as well as the recently broken neckline and the pale blue .886 at 100.12.

The EURUSD shows the greatest potential risk, with a recent .886 tag having occurred at the top of a falling channel and rising wedge.

Given all that, it's quite possible the 1712 target won't be reached until Monday -- if then.  There continues to be great downside risk to this rally built on QE and ramp jobs.  I would go to cash for the weekend, but would continue to play the long position unless we reach 1712 or stop out. 

I'd leave stops around 1698, but would close out the long on any significant weakness.  It has backtested the 1.272 and should be positioned for another leg up.  But, it's also running on fumes...

I have to leave you now, but will post later this afternoon or evening.

GLTA.

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As a young boy, I spent many hours listening to my grandparents' music collection.  One of my favorites was Guy Lombardo and his Royal Canadians.  His music still brings a nostalgic smile to my face...

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Reposted from pebblewriter.com...

Everything is going according to plan this morning, with all currency pairs approaching their targets from last week.

The dollar is back to the white channel midline where exciting things happen.  The last squirt higher led to 84.595 on May 23, the day after SPX topped out at 1687.

This time, however, there's a falling purple channel and the .786 Fib line to consider.

A close up reveals that DX is also pushing up through the red channel .382 line.

While the EURUSD is approaching the .786 retracement of its rally from the 1.2795 low, the red channel midline and the bottom of the light blue channel.

A close up...

The USDJPY is closing in on our 101.59 target at the .786 Fib.

The e-minis, which back-tested the bottom of their purple channel at the white .500 Fib yesterday, took another run overnight but fell short -- reaching only the top of the falling red channel.

We'll see if SPX has enough juice left to take its own shot.  The first test this morning will be pushing through the top of the red channel -- at least intra-day -- at about 1621.50.

UPDATE:  9:52 AM

SPX reached the red channel and is debating whether to push through or take a breather.

Recall, the cluster of targets we discussed last week includes:

• the gap fill at 1629.22
• the IH&S target at 1631.67
• the red .786 Fib at 1634.10
• the grey .618 at 1638.72

SPX came within 3 points of filling the gap yesterday, but ran into the same channel top and fell back to close at the bottom of the grey channel in the 5th such stop-clearing exercise in a week and the 9th close at or near the daily low in a fortnight.

It also tagged the .500 grey Fib (of 1687-1560) yesterday, where it (so far) reacted less than it did at the red .618.

So, the red pattern is assumed to be the one in charge, with a Gartley Pattern completion at the red .786 (1634.10) the next major Fib target on the radar.

UPDATE:  10:15 AM

A close up shows two smaller patterns also pointing to the 1631-1635 range if SPX can poke through the red channel top.  Note also the presence of the pink .618 here -- contributing to the pause.

We've had a few pieces of economic news this morning.  First, the Fed is set to vote on Basel III this morning.  While significantly watered down, it could still be construed as a speed bump on the road to global financial domination.

Also, Census released the factory orders survey for May. The managed (a.k.a. seasonally adjusted) version came in slightly higher than expected, at +2.1% versus 2.0% consensus and 1.3% for April.

There is bound to be some concern that the slight beat undermines support for QE (does anything else matter?)

This explains why the less-managed, de-emphasized, and not seasonally adjusted number, at +5.4% month-over-month, is the better number for a change.  Remember the good old days when they massaged the numbers to make things look better?

continued on pebblewriter.com...