USD Index – Is once again testing the strong neckline support near 79.25. The price action following this test will tell us a lot about the future for USD. I still expect this support to provide a springboard for the next rally in the USD, but we will have to see what happens down here.
EUR/USD – Should the EUR be stronger than the USD? At this point I don’t think so. However every time the EU seems to finally reach a solution to a problem, this time it’s Greece and the private investor haircut, the EUR rallies, but new troubles is already stirring at the EU and ECB. This time it’s Portugal. The 10-Y yield is at all time high near Portuguese (see the chart just below). EUR/USD is sitting just below strong resistance in the 130.85 – 131.35 area, which I expect will hold for a break below 128.69, that will confirm renewed downside pressure.
If however resistance at 131 unexpectedly breaks we would be headed for 132.35.
10 Y Portuguese bond yield.
VIX Index – Closed back into the Bollinger Band and we could have a bottom in place for a break above ending diagonal (wedge) resistance line near 22.15. A break above 22.15 will call for a rally higher towards 34.74.However as long as we stay below 21.24 and more importantly 22.15 we must accept the possibility of a new low below 28.16, but there isn’t much more room to the downside.
Dow Jones Industrial – Tested resistance at 12.751, but couldn’t break it. Wave c of Y is now equal in length to wave a of Y also raising the potential of a top being close at hand. You know I think this rally is unsustainable, but as long as support at 12,463 and more importantly 12,311 isn’t broken we must accept that the trend is up.
10 Y U.S Bonds (TLT) – After some indecision it finally seems as we are headed towards support near 109.80 (see my post from January 4′th here: http://theelliottwavesufer.blogspot.com/2012/01/elliott-wave-and-technical-analysis-on_04.html)
Dow Jones Industrial – Tested resistance at 12.751, but couldn’t break it. Wave c of Y is now equal in length to wave a of Y also raising the potential of a top being close at hand. You know I think this rally is unsustainable, but as long as support at 12,463 and more importantly 12,311 isn’t broken we must accept that the trend is up.
10 Y U.S Bonds (TLT) – After some indecision it finally seems as we are headed towards support near 109.80 (see my post from January 4′th here: http://theelliottwavesufer.blogspot.com/2012/01/elliott-wave-and-technical-analysis-on_04.html)A break below 109,80 will call for a much deeper decline.
Gold – Is testing double resistance in this area. I still think the resistance near 1,680 will protect the upside for a clear break below 1,644 and more importantly 1,625, which would call for a new decline towards strong support near 1,520.
Crude oil – Is attempting a break out. We need to see some follow through, but I will be looking for a decline towards 92.52 if we break below 98.70 and more importantly 97.40. The really big test will be if we can manage a break below 92.52, which would call for a decline towards the neckline support near 77.50.
Gold – Is testing double resistance in this area. I still think the resistance near 1,680 will protect the upside for a clear break below 1,644 and more importantly 1,625, which would call for a new decline towards strong support near 1,520.A clear break above 1,680 will call for a new rally towards 1,920 and possibly 2,036.
Crude oil – Is attempting a break out. We need to see some follow through, but I will be looking for a decline towards 92.52 if we break below 98.70 and more importantly 97.40. The really big test will be if we can manage a break below 92.52, which would call for a decline towards the neckline support near 77.50. Risk is still a break above the resistance area between 103.75 – 104.75 and more importantly 106.50 which would call for a new rally towards the 114 – 115 area.
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