FYI | Aug 15 2012
FNArena has added another video to its Investors Education section on the website. This week ATW's Jerry Simmons looks at the AUD rally, discusses a steadier run for the euro, prognosticates on a few market indices futures and soy beans, among many other things.
Jerry points out it’s been a long, long while since we’ve seen any sort of reversal on the EUR/AUD weekly chart. Last week was looking like there might be some action, with the euro rallying to the prior week’s high, but then it rolled over to test the week’s low.
In fact, Jerry notes we have not seen a weekly reversal breakout bar (RBO) to the upside in 12 weeks and currencies trend the best for weekly RBOs. When we see one, it is likely to be a major event given we’ve gone so long without an upside breakout. He explains that this is a “market that is way, way, way oversold” and that a reversal from here could be massive.
We are at the extreme limit, says Jerry, noting the EUR/AUD has a major impact on equities markets. The last time we had a euro rally against the AUD, we had a runaway bull market in equities and we will probably see the same in the next big run of the EUR/AUD.
Meanwhile, the EUR/USD daily slowed its recent trajectory last week and had pulled back to key support zone at 1.2280-1.2290 by Friday. Jerry thinks we’ll need to see a run up to 1.2340-1.2345 if 1.2320-1.2330 is going to become support. The odds are in favor of a range expansion and volatility this week, with the current short term bias remaining downward as long as we stay below 1.2330.
Jerry also explains how the Nasdaq 100 daily futures chart had a geometric exponential curve during the bubble in 2000 much like the Treasuries are now. If the dot com bubble was an impulsing bull market, then Jerry reasons 2001-02 was an impulsing bear market and the Nasdaq 100 daily futures is currently impulsing again.
iShares FTSE/Xinhua China 25 Index weekly chart must see a confirmed breakout beyond 36.00 to lead the equities into a bull market, but is looking to be very vulnerable for a weekly reversal breakout bar to the downside.
Post a recent drought analysis report, soybeans have posted a pretty big move up, but remain well off the highs. Jerry thinks its starting to look like a topping market and needs watching this week. With the chart showing an inside bar the week prior, caution needs to be taken. Jerry says 1530-1540 will be the key level.
To view the ATW Strategic Prep Video click HERE or visit the FNArena Investors Education section of the website.
All views expressed are Jerry Simmons's, not FNArena's (see our disclaimer).
Jerry Simmons has over 25 years of full-time trading experience. He is the senior partner and head mentor for the “Masters” Programme within the education system at New York based Advanced Trading Workshop (ATW).
FNArena is pleased to have Jerry Simmons as a highly valued contributor to its service which aims at both educating investors and assisting them with their own market analyses.
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