Tuesday, October 2, 2007

Updates on the Yen and Others

This weekly picture (above) of the Yen looks okay to me. We are still north of the 40 week ma and the MacD is positively diverging. The action since August looks to be a pennant formation which is a continuation pattern and is usually resolved in the direction of the preceding trend. This is still the stock of the global speculative soup and until this breaks down decisively the global bull is suspect. No one can really put his/her finger on the size of the yen carry trade, so suffice to say it is enormous.

In a recent email I was asked why I focus on the longer term charts so much. The reason I do is simple. The longer term charts smooth out the short term neurotic buying and selling that the market tends to experience. These spikes if sustainable will show up on the chart besides the weekly is less vulnerable to whipsaws, not entirely but less so in my experience.

Quick Hits

Ratheon(RTN) popped but still looks vulnerable to the downside. 63.50 is now my new short entry with stop above recent highs of 65.50.

Meritage Homes(MTH) broke the 15.50 level of the descending triangle and is now rallying into the level which should act as resistance.

Chevron(CVX) grinding here, but stops not violated. I will add to the short as the reaction low of 91.45 is taken out to the downside.

JC Penney(JCP) is just biding its time, though a break of 63 should kick start the downside train.

Don't look now but Int'al Coal (ICO) is starting to percolate.

Crude oil (USO) needs to hold 60 or a healthy short term setback will be upon us. Manage your stops !

Gold (GLD) has had a great run and a pull back to 68-69 cannot be ruled out.

The grains (DBA) touched 31 the other day and look to consolidate again 27-28 looks like a decent enough area to do the work.

Good trading to you all.

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