Thread: The USD/JPY still isn’t backing up the rally, should we worry?

The U.S stock indices continued to climb higher last week, reaching new highs. Even though many investor’s on Wall Street are now calling for a major pullback, after this 7 month rally, the U.S indices continued to climb higher, prevailing against all odds. Last week’s trading week was backed by economic data, as further sectors in the U.S showed an improving situation. Retail sales jumped by 2.7%, compared to an expected 2% increase, while inflation data showed a mild situation. The CPI m/m came out just over expectations, while the y/y figure came out better than expected at -1.5%. When taking a glance at the chart below one can see that despite all the thoughts, last week’s trading week was characterized by increasing volume on all the major indices. When observing the leading technology sector, one can see that the index broke its major resistance level (200 weekly moving average), characterized by inclining volume.



To date officials opinions have changed regarding the economic outlook and many banks are now analyzing exit strategies, to reduce the government’s influences in the markets. The ongoing positive data along with comments from officials are now having extreme pressure on the Green back, as investors are rushing back into riskier assets. When observing the various currency pairs such as the AUD/USD and the EUR/USD together with the current stock rally, one can see that similar to the previous cycle, these assets are showing a strong correlation, climbing higher on expectations of a brighter future.

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The U.S stock indices continued to climb higher last week, reaching new highs. Even though many investor’s on Wall Street are now calling for a major pullback, after this 7 month rally, the U.S indices continued to climb higher, prevailing against all odds. Last week’s trading week was backed by economic data, as further sectors in the U.S showed an improving situation. Retail sales jumped by 2.7%, compared to an expected 2% increase, while inflation data showed a mild situation. The CPI m/m came out just over expectations, while the y/y figure came out better than expected at -1.5%. When taking a glance at the chart below one can see that despite all the thoughts, last week’s trading week was characterized by increasing volume on all the major indices. When observing the leading technology sector, one can see that the index broke its major resistance level (200 weekly moving average), characterized by inclining volume. www.dodjit.com

The U.S stock indices continued to climb higher last week, reaching new highs. Even though many investor’s on Wall Street are now calling for a major pullback, after this 7 month rally, the U.S indices continued to climb higher, prevailing against all odds. Last week’s trading week was backed by » Full Story on dodjit.com

The UNG ETF continues to trade at a premium which could disappear in an instant leaving investors in distress. As Jim pointed out last night on his program, investing in natural gas companies may be a better way to play natural gas. I prefer playing FCG which is an ETF that owns a diversified number of natural gas companies. My second choice is AMJ which is an ETN that focuses on natural gas transportation and pays 7 percent. for more detail log on to www.dodjit.com

The Gorgon project led by Chevron, Exxon and Royal Dutch shows a commmitment to natural gas that speaks volumes over how these companies, so key to any switchover to natural gas to power cars, are thinking. It is a difficult concept to get over, but these three, if they campaigned for natural gas in Washington, would have more clout than all of the independents. But they have never gotten behind natural gas so it is considered unreliable by many. Important to keep an eye on. for more detail log on to www.dodjit.com

Traders that want to complain about something can point to the fact that the QQQQ and SPY have been up 5 days in a row and may be in need of a rest, but a close above 1040 on the emini likely send us to 1055-1060 in a hurry. Anything resembling a dip continues to be bought.
I am a trader with a very short time horizon, but if I look through the lens of a hedgie or fund manager I would say it's scarier to be short, but harder to be long. Getting short this market for anything more than a scalp is scary because of the persistent bid...but initiating new long investments seems crazy given how far we have run since early March. Perhaps the contrarian's view (for those with a time horizon longer than 10 minutes) is to look for reasons to remain long rather than get short. For more detail log on to www.dodjit.com

The bulls need to defend moderate support at 1037.25 and target strong resistance at 1039...above 1039 and we should momentum build in favor of the bulls. The volatility and volume in the markets continue to be anemic...but I would not rule out the possibility of a surge to and through moderate resistance at 1041.50 and towards 1047.25.
The few remaining bears need to push us back through moderate support at 1033.75 and target moderate/strong support at 1030. However, most traders will not give the short side a second look until we trade back through both moderate support at 1026.25 and strong support at 1023.For more detail log on to www.dodjit.com

The USDJPY made significant bullish momentum yesterday, topped at 92.53 but closed a little bit lower at 91.98. On h4 chart below we can see that the trendline resistance (red) has been broken to the upside and now traded above 91.80 area suggesting potential upside outlook. However, I think the situation can be tricky at this phase. The pair is now testing the lower line of the bullish channel. As long as the bullish channel valid, expect further bullish correction scenario towards 93.00 area. CCI in overbought area and heading down on h4 chart suggesting potential downside pressure testing the lower line of the bullish channel. A violation to the bullish channel and a pullback below 91.80 area should diminished the bullish correction outlook and could lead us back into 90.70 area.