Logo Background RSS

Advertisement

Friday Technical Update: Default Before Bailout?

  • Written by Syndicated Publisher 326 Comments326 Comments Comments
    November 19, 2011

    Enough of those macro focused market recaps, today let’s get more technical. Another low volume day which considering options expiration is a little unusual. Interesting how low the Vix moved today but it may simply be attributed to options expiration. Will be interesting to see where the Skew comes in today.

    Not much else to report other than some confirmation of news that Germany is looking to have countries default prior to receive bailout money. More to come on that over the weekend if warranted.

    As stated previously I am watching the currencies for direction here. Why you ask? Just look at the correlation intraday with the ES and AUD.

    The chicken or the egg? Who is leading who here? Based on moves this week and the fact that the ES (SPX futures) is rich compared to pretty much every asset class I say the AUD. Look at the intraday correlation of both ES (top) and AUD (bottom).

     

    EUR/USD

    The neckline on a large head and shoulders pattern was tested once again today and failed. This chart is looking very bearish here.

     

    AUD/USD

    Failed the flag pattern and back test. Currently testing neckline of a somewhat poorly defined head and shoulders pattern.

     

    SPY

    October up trend has failed as has the triangle pattern everyone has been watching.

    Apple (AAPL)

    This leader of tech continues to look very weak now down 12% since October 17. This is far more than just a missed earnings report. People are raising cash in my view. Today the stock pierced the June up trend line. Making matters more bearish is the reality that the options chain for November had max pain in the 380-385 range which should have put a bid into the stock yet it still was weak.

     

    Treasuries

    10 and 30 year bonds look very bullish in price, bearish in yield. The 10 year yield chart below shows a down trending channel since August, failed breakout and a gap fill in the 1.78% area. To  put this in perspective a 30 year VS SPX chart is also shown.

     

    Should be an interesting weekend of news, rumors and who knows maybe a bankruptcy or two.

    Enjoy your weekend!

    Images: Flickr (licence attribution)

    About the Author

    Macro Story is designed as a one stop source for all of your macro related news and data.  From credit markets to economic data to geopolitics, you will find it all in a simple and organized fashion.  Content is presented in a format that allows you to read as little or as much as prefered.  Whether your goal is to do advanced research, a simple market overview or to become educated on macro subjects, the site has been designed with you in mind.
    Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInPin on PinterestShare on StumbleUponShare on RedditShare on TumblrDigg thisBuffer this pageFlattr the authorEmail this to someonePrint this page

Advertisement

Closed Comments are currently closed.
Real Time Web Analytics