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Thursday Technical Update: Markets Flat

  • Written by Syndicated Publisher No Comments Comments
    January 13, 2012

    A somewhat interesting day today with USD down and EUR up nearly 1% on the session and for the most part markets were flat. You would have expected a much larger move. Yet another sign of tired equity markets as they try to break above resistance within an ascending wedge pattern.

    Treasury and USD still remain in bullish patterns with treasury looking the strongest. SPY volume was very light yet again and in line with holiday levels. Another sign of buyer exhaustion as resistance levels are met. The vix interestingly closed down 3% on the session but was up nearly 4% even when equities were down only slightly.

    Plenty of mixed signals out there indeed today. Regardless the credit event trade is still alive and well. Nothing changed to alter that trade thesis.

    Treasury Futures

    Even with a decent pullback in the USD today the treasury futures remain in breakout mode sitting above key resistance, barely down on the session and within 1% off all time highs. That alone speaks to the strength of the entire curve.

    Below are five and ten year futures once again sitting poised for a clean break to all time highs after six months of consolidation above prior highs. In other words no one is sitting on a loss and there is thus no overhead resistance.

    5 Year Futures – Six Month Daily

    10 Year Futures – Six Month Daily


    Precious metal, gold, silver were strongly higher on the session but primarily driven by weakness in the USD. Oil which had been very strong the past few months showed its hand and put in a large reversal after the Iran premium was removed as the EU embargo appears will be delayed for six months.

    What is rather interesting though is prior to the breakdown in oil today the CRB was actually down on the session in light of a weak USD. It ended up putting in a large reversal candle showing complete failure of the prior break of the down trend. Oil also sits right on support within an ascending wedge. A break of support would set up a sharp move lower. Something to watch in the coming session(s).

    Oil – Six Month Daily

    CRB – Six Month Daily

    Images: Flickr (licence attribution)

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