It was a tricky week of trading last week. As we head into the new week let’s look at some charts for perspective;
The S&P 500 and Nasdaq 100 left outside weeks on their weekly charts while the Russell 2000, the transports and financials had inside weeks. Both types of candles are potentially bullish, but only so if we see follow-through buying this week.
As a reminder, I remain entirely directionally agnostic for the time being and am focusing my time on the quick hits intraday rather than leaning out any windows and risking chopped off limbs as a result of the massive headline risk
While equities acted well last week volume left much to be desired for. NYSE total volume last week was significantly on the decline.
The dollar index while trading inversely to equities (lower for the week) did manage to hold the 82 level as support. Until said level is broken the dollar remains in the near-term uptrend.
The AUD/USD FX rate managed to hold the 0.955 level, which serves as crucial multi-year support and has plenty of implications for global risk assets appetite should it fail.
Gold remains below the multi-year uptrend and last week rallied to re-test that trend from below. Too early to tell whats next but I for one will be watching AUD/USD for clues.
Silver too rallied last week but remains right at the multi-year uptrend, which again managed to hold as support.
Copper is approaching its multiyear support neckline again and next time it reaches that level it would be 5th time…the more a level gets tested the more it weakens as support/resistance.
The massive risk asset rally overnight is fading courtesy of a Spain banking sector bailout is fading as I type this. Note the Spain 10 year bond reversing massively intraday and dropping below a four day support zone.
All in all we remain in very frisky waters where headline and rumor risk is out of control. I am keeping risk very tight and timeframes short until markets calm somewhat.