Sunday, January 31, 2010

XLF - SPX - EUR - Update: 1.31.10

Following up from 1.28.10 : <--- click here


Current Close: 14.18
Previous Close (1.28.10): 14.28


Current Close: 1073.87
Previous Close (1.28.10): 1084.53


Current Close: 138.39
Previous Close (1.28.10): 139.48


It appears all or short term calls are playing out as we predicted except financials. We will be watching over the next week to see if support levels form earlier than the specified two week period (short term).


Weekly Chart has yet to converge to Daily Charts which points to further movements south. You may see temporary slight whipsaws (entries for shorts) to the upside, but eventually the 137- to low 138 levels will be testing long term support from June 09 levels. In which we would expect the temporary dollar weakness (our Mid term view on EUR).


Friday was a temporary down day caused by sentiment which helped lead the SPX down. But We are confident 40 support on RSI is holding as MACD momentum is reversing. We expect temporary whipsaw up (short term bull). Currently weekly charts show 50 RSI support is holding (short term whipsaw to upside). But mid term, fundamentally, we are bearish on financials and expect that to filter through in quarterly earnings reports.


The weekly chart rally is finally broken (via upper 1st and 2nd BB analysis). Daily chart anlysis shows bottoming over the next two weeks. This would coincide with below 1070 support (confirms short term bear). At which at that point 50 RSI on the weekly chart should hold. This should lead to side ways trading (our neutral bearish view). We will follow up on sentiment analysis to confirm our mid term view (may
change depending on analysis).


Alexander LĂȘ
Managing Partner
Analyze Capital LLC

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