Moment of truth

DAX pattern

This is very similar to the one on FTSE 100 which has turned too noisy today due to econ news. Therefore I am posting this one which may be the EU reference for US opening.

Interesting setup at FTSE 100 - Updated

EOD UPDATE:




I think they will buy this dip into the opening of US session at least for a while. Nevertheless this setup is interesting since FTSE 100 was among the strongest indices in EU....

Regression day II - Completing the move

As we recently posted , many instruments have broken its mid term regression channels. We spoke about the technical relevance of that fact and also described at the charts commentary that after the 1st step (channel breakdown) 2 more steps normally follows to complete the move :

• 2- Retest the channel or any relevant resistance
• 3 - Break down again

This is what we saw today at many instruments (see updated charts below)


EURJPY


EURUSD


S&P100


ES





Another perfect example at QM (oil future)



Conclusion:

The various indications we were observing about more weakness in the bulls run have been confirmed today in various equities sectors as well as oil and gold. We see this move as the beginning of a pullback inside a bullish main trend. To believe this pullback has become some serious mid term bearish trend we need to see a daily close below ES990, which was very close today but is yet to be seen. There are quite a few technical arguments for the bears but need to gain consistence during next week for us to officially turn the mid term trend to bearish.

Daily wrap up - "Regression" day

We finally went back to some bearish dynamics today after a number of the signs of weakness we have been observing matured. As an interesting technical hint, many of them broke their rising Regression Channels, which is meaningful from the mathematical point of view by itself, but moreover since it happened the same day to many of the instruments whose performance we believe is linked
We think this is a pullback which can eventually become a mid term trend change if ES makes a daily close below 990. In any case the main trend underlaying is still bullish.
The plan for today is stay on the sidelines and wait for a confirmation of this move after FOMC anounces.

ES


EURJPY



EURUSD



SP100

Quick note: Techs sneaking away

Before posting a weekly wrap up I wanted to share with you some observations during today's rally. First of all: main trend continues to be bullish and I am not going to fight it (Plan A for day trading stands) but as I am seeing quite a few signs of weakness, will point them out to prevent unpleasant surprises :).
This line up pretty well with our previous findings about techs relative weakness. We are seeing clear divergences between most major indices strength and techs behavior.

See the following Semiconductors chart:

Who is the strongest here?

Many analysts have pointed out that Tech sector led this rally. Although I don't deny it, there are many factors telling us that NASDAQ is getting weaker and probably will lead the correction down. In such a case we should focus our attention on that sector as a leading and important indicator. With that in mind I gathered some market internal charts to show you later on and that will be useful to monitor the corrections that may be already on their way.
Here is a simple comparison between NYA and COMPQ's Summation Indices (extended market breadth indicator) that reveal who is showing more strength

NYA


COMPQ


to be continued....