Tuesday, March 30, 2010

SPX Update: 3.30.10

As you can see from my last post March 24, the SPX is slighty up. Though from last week into this week prices has arguably traded sideways with no big significant up or down days. Volume is also very average to light confirming this sideways trading.

I am still maintaining my bearish view into next week. Prices are too high at these level to substantially sustain levels in the 1200. IF prices do reach 1200 before a 5%+ retracement, I would consider strongly shorting at perceived resistance levels.

I have 7 more days for my thesis to play out, afterwards I will assess my performance. As of late timing has been an issue for my short-term performance, which is typically why I tend to trade longer term trends. Overall, my mid and longer term views also still hold. (see my march 24 post --> CLICK HERE MARCH 24th POST>)

Wednesday, March 24, 2010

SPX Technical Update: March 24, 2010

** Skip to bottom for Summary and Conclusions

So I was completely wrong on my last call for the short term. I was bearish from two weeks ago.


Looking back I can pick out a few flaws from my last analysis. I should have given more weight on the weekly time frame.

I should have realized that on the daily chart the RSI could remain extended for a weekly time frame which actually occurred, there was evidence of this on the weekly chart, with prices showing plenty of upward movement to 1220+ (via 200 sma resistance considerable above current price levels). Though I am bullish to 1220+, I would prefer to see a healthy 5% correct to levels of 1120 from current highs to be certain of a continued bull trend to 1220+ or beyond.

I based my last short term bearish thesis on the daily chart, as you see that 1150 resistance level was blown right out of the water as the RSI remained extended. It is only now, that MACD may be seeing a momentum reversal. To those following, always keep in mind of the lagged nature of these slow moving indicators. To be a bit more precise perhaps I may try to start experimenting with exponential indicators.

Looking back to the weekly chart, we definitely are seeing strong bearish development around the 1220 level. 200 SMA resistance coincides with a 70 RSI topping out. The MACD alludes to a very interesting question for the current trend. If prices do top out at 1220, will we see another 10% drop? which barely budged the MACD or will this be a full out reversal where the MACD will work out its pent up downward momentum over the course of a few months returning to center-line balance 0. If this is the case, a true test of the uptrend will be when prices test 1030 support.

Other bearish confirmation seen is in the consolidation of mild volume, I'm sure BB analysis will point to price consideration which will confirm strong bull trend or a reversal to the downside (either or).


Time Frames:

I will be bullish after a decent 5% correction in the second quarter (perhaps bearish for rest of march - making march half bull then half bear). I will be bullish to levels of 1220+, which I believe can be achieved within the first two months of the second quarter.

Once 1220 resistance holds we should see at least a month of price pull backs 5-10%+ (during the last month of the second quarter). "IF" I am completely wrong about this resistance level like last time (this time I doubt it though). Hell, I'll be darn sure to see 1300+ levels, which sounds insane already...



All in all, I will wait for that correction in the SPX, and be bullish to 1220+ which I think will be achieved within the first two months of second quarter. Though currently to get there I think a 5% correction to 1120 is needed for current uptrend to remain healthy (possibly a good entry point if one is bullish to higher than 1220+). So for next two weeks ill be looking for a continued pullback. I will keep posted on this.

Though with past movements and relative strength vs world equity markets, a lighter pull back is feasible as US seems to be "it" place to be. Though, I'm a bit of a skeptic about the legitimacy of such ideas, considering the weakness of our labor markets still. But compared to what Europe is going through I guess the US does greener on the other side for sure.



I have to change my time frames and target levels considering how bullish the SPX has been.

This is what I said last time:


"Apologies for confusing rhetoric:

1-2 weeks out: Bearish
4 weeks and longer: Bullish

In other words bearish for most of March but by mid to end of second quarter I will be bullish on SPX to the 1200 levels. "


Since the bull's have moved faster than my expectations, I'm now bearish for the time that I said I would be bullish from my last post. And certainly seeing 1200+ levels is more feasible sooner than later.

1. bearish two weeks out (rest of march)
2. Beyond that as long as a lower high is made I will be bullish 2 months into the second quarter.


The key confirmation of a health 1200 level will be since with a decent correction that creates a higher low



Alexander Lê
Managing Partner
Analyze Capital LLC

Tuesday, March 23, 2010

Existing Home Sales- 3.23.2010

Via Bloomberg:

Demand for existing homes remained extremely weak in February with sales at a 5.02 million annual rate for a 0.6 percent decline from January. The seasonal build in supply, at 8.6 months vs. 7.8 in January and 7.2 in December, is the steepest in the last 20 years. The build has been holding down prices which are at a median $165,100, up 0.1 percent from February, and at an average $210,500, down 0.8 percent on the month.

The single-family component, which makes up the vast bulk of sales, fell 1.4 percent in the month to a 4.37 million rate. Distressed sales made up 35 percent of total sales vs. 38 percent in January. All-cash sales, reflecting tight credit and low prices, are extraordinarily high at 27 percent. Regional data show special month-on-month and year-on-year weakness in the still-troubled West followed by weakness in the South which is by far the largest region. The Midwest and Northeast, in perhaps the best news in the report, showed strength in February.

The National Association of Realtors, which compiles the report, still expects to see a surge in sales surrounding the second-round expiration of tax credits this spring. But the housing market is in limbo right now, depending on stimulus effects which even if they do appear point to new trouble at mid-year, es
pecially if mortgage rates begin to rise. New home sales will be posted tomorrow.

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC

Thursday, March 18, 2010

Consumer Price Index A.K.A. Inflation

Temporarily soft energy costs pulled down the headline CPI for February while weak shelter costs kept core inflation very sluggish. Overall CPI inflation for February eased to no change from 0.2 percent the month before. The latest came in just below the market forecast for a 0.1 percent uptick. Core CPI inflation rebounded a modest 0.1 percent, following a 0.1 percent dip in January and matching consensus expectations. A number of weak components point to the fact that inflation pressures, indeed, are subdued. Shelter costs were flat in the latest month while declines also were seen in apparel and recreation.

Looking at detail, the energy component of the CPI declined 0.5 percent in February after jumping 2.8 percent the month before. Gasoline temporarily eased 1.4 percent, following a 4.4 percent jump in January. Food inflation slowed in February to 0.1 percent from 0.2 percent in January.

Year-on-year, overall CPI inflation fell to 2.2 percent (seasonally adjusted) from 2.7 percent in January. The core rate was slipped in February to 1.3 percent from 1.5 percent the month before. On an unadjusted year-ago basis, the headline number was up 2.1 percent in February while the core was up 1.3 percent.

Today's report leaves a lot of room for the Fed to keep rates low for some time. On the news, Treasury yields edged down and equity futures rose slightly. At the same time, initial jobless claims came in very close to expectations.

My only take from this report is that the economy is not inflating. Meaning QE will likely remain in some form until the Fed raises rates.

It is a beautiful day in New York. Take some time away from the terminal and get some spring air. I am likely heading up to Newport, RI later tonight. Enjoy the rest of the trading week.

Monday, March 15, 2010

Currency Update: 03.15.10

I think an important question for those trading major pairs is whether or not the dollar strength has lost its luster or is there more strength to come in the second quarter. Looking in the longer term frames, the 3rd and 4th quarter seem promising for a return to dollar weakness based off the technicals.

Any fundamental justifications come to mind? Greek Debt situation resolved? Political unrest in the UK quelled? Central Banks ramping up QE once again. Continued stale low interest rates? Tame economic data? Decrease in risk aversion... inflation?

What are you guys betting?


Alexander Lê
Managing Parnter
Analyze Capital LLC

JPY Trade Update: 03.16.10

Gross P/L for a little over 1 and half weeks stands at $2,500 with 1 standard lot long the JPY. Green arrow indicates entry. A little sloppy on the entry, but for the trend captured it was decent. Trade indicators still indicate upward movement by the end of this week into next week. Will consider taking profits.


Alexander Lê
Managing Parnter
Analyze Capital LLC

Monday, March 8, 2010

JPY Discussion - 03.08.10

Time Lapse of Tokyo:

Tokyo/Glow from Nathan Johnston on Vimeo.

A very good discussion of the JPY movements at the Lord of Trading

JPY DISCUSSION <-- Click here to join

Here's a quote from the discussion:

"A couple of hours after I wrote this, Japanese media speculated (also) that Japan would consider further easing of monetary policy. Very very soon, the time may have come but we still have the time, the target is 100+ guys! ..." -Sauros

I'm currently long myself, though tomorrow won't be watching closely. A very busy day, I do have my tight stops and risk management in place though. Will update through out the week.


Alexander Lê
Managing Partner
Analyze Capital LLC

Sunday, March 7, 2010

SPX Technical Forecast - 03.07.10

**Skip to summary at the bottom if you don't care for the analysis**

On the chart above I draw out the bullish and bearish arguments.

Currently I'm slightly leaning towards the bullish argument despite numerous bearish evidence.

Bearish Arguments:

1. Strong sign of 1150 resistence
2. Failure at 1150 can be indicative of a double top
3. Daily RSI confirms top situation over 1-2 weeks
4. Lack of strong bullish volume confirmation for a break in 1150 resistance
5. Weekly Chart also confirms 1150 resistance
6. Weekly Chart presents significant downward pressure with prices below 200 SMA
7. Weekly MACD points out to already topped out upward momentum and the begging of downward momentum.

For this Bearish situation to be confirmed it will take lots of work for charts to play out this way. Prices will have to top out within 1 to 1 and half weeks, and then the full bear trend would only be confirmed over a period of more than 4 weeks. The last 10%+ drop took over a month before prices started to recover. So another significant drop would have to occur along with a break in 1060 support created from the last drop.

Confirmation signals for a bear tend would be a break in 50 RSI support. The previous uptrend, pre-10%+ drop, 50 RSI support held. Once that uptrend broke, 50 resistance held throughout the 10%+ drop. Post levels will act as a confirmations signal and give evidence to whether or not we will see higher highs or higher lows.

Bullish Evidence (4 weeks + out)

In my opinion I find this bearish move more unlikely in the short term (4 weeks + ).

Here is the Bullish Evidence:

1. Weekly RSI is not near oversold territory yet.
2. Previous 10%+ correction leaves huge leeway for higher lows.
3. Short term support of 50 and 200 SMA on Daily and on weekly short term support of 50 SMA all under price action.

The way the charts are set up inter-temporally, tells me that the upward trend started from march or july is faltering (via bearish evidence). Such a long term trend cannot be sustained beyond higher resistance levels of 1200+.

The Bearish evidence only points to a short term correction where prices will fail at 1150, correct and stay above support of 1060 making a higher low. A retest will have to occur and break to the upside leaving prices room to move much closer to 1200 levels (price fail will have to play out between 1-2 weeks - expect downside movements by the end of this week into the following).

The short term SMA evidence will also be key indicators, as long as prices levels stay above, such a bullish move to 1200 level post an 1150 price fail will occur with a higher probability. The 200 SMA weekly only gives evidence that higher prices past 1200 will be less likely.

By mid or the end of the second quarter we will see the SPX at 1200 levels. For third and fourth quarter levels I suggest looking to the fundamentals.


Apologies for confusing rhetoric:

1-2 weeks out: Bearish
4 weeks and longer: Bullish

In other words bearish for most of March but by mid to end of second quarter I will be bullish on SPX to the 1200 levels.


Alexander Lê
Managing Partner
Analyze Capital LLC

Thursday, March 4, 2010

Going in for the Kill- 03.04.2010

Well it looks like my timing on entry into the UNG was a bit off. I failed to correctly forecast the Nat Gas inventory reports this morning as they declined less then expected (see morning updates ). Domestic production, specifically supplies from unconventional gas fields such as the Marcellus Shale in the Northeast/Appalachia region and the Haynesville Shale in Louisiana, has not declined substantially despite reductions in overall rig counts compared with this time last year. Natural Gas sold off hard and UNG has touched a low of $8.25. However, I stand by my thesis.



•Seasonality has beaten it up this winter while we have had warmer than expected temperatures in the Midwestern United States.

•As of Friday, February 26, working gas in underground storage was 1,737 billion cubic feet (Bcf), which is 1.2 percent above the 5-year (2005-2009) average. The implied net withdrawal from storage was 116 Bcf.


•Since September the RSI is in a Bullish trend forming higher highs after a bounce off of support at 30 or so.

•The 50 day Simple Moving Average will act as near term resistance.

Hence, the tape should carry me to about 9.25-9.50 before I have to make a decision.

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC

Currency Trade Update: 3.04.10

After 3 poor trading days in a row I made an excellent trade from yesterday into today.

Green arrows indicate my trade: Shorted at the top green arrow and closed out to take profits at the bottom green arrow. Yesterday the EUR traded out of my forecasted range as prices hit 1.37. I expected a pullback and entered short top of the BB's. My patience paid off.

Again the Daily chart is coming to a squeeze so price direction will be determined along with trend confirmation of a continued down trend or a prolonged whipsaw to the upside or a bottoming and a trend reversal. Prices seem to be failing at 50 RSI and strong new 1.37 resistance of a lower high has formed. Lots of evidence of a continued down trend. Though I will wait until Friday to re-evaluate of how i want to trade going forward.

Today my P/L is well over 3,000+ since I am also short the GBP and long the JPY from last night. Will be monitoring closely the movements and reporting when I can.

Though I will have to ramp up the academics as they have taken a beating. Hermit mode time.


Alexander Lê
Managing Partner
Analyze Capital LLC

Mr. Trichet Speaks to the Masses- 03.04.2010

"If there's one thing I learned in prison it's that money is not the prime commodity in our lives... time is."
--Gekko, MNS

Highlights from ECB President Jean-Claude Trichet’s Statement

Rates remeain unchanged at 1.00%

Euro Zone Inflation and Growth

•Inflation expectations remain firmly anchored inline with the Governing Council’s aim of keeping inflation rates below, but close to, 2% medium term

•2010 Inflation forecast .8% to 1.6%

•2011 Inflation forecst .9% to 2.1%

•Euro area has continued to benefit from significant macroeconomic stimulus

•2010 GDP growth forecast .4% to 1.2%

•2011 GDP growth forecast .5% to 2.5%

•Loans to non-financial corporations can be expected to remain weak for some time after economic activity has picked up

•We expect price stability to be maintained medium term, supporting the purchasing power of euro area households

Quantitative Easing

•We decided to continue conducting both the main refinancing operations (MROs) and special-term refinancing operations with a maturity of one maintenance period as fixed rate tender procedures as long as necessary

•The Governing Council will continue to implement phasing-out of the extraordinary liquidity measures

•Banks should use improved funding conditions to strengthen their capita; bases and take full advantage of government support for recapitalization

Greece and The PIIGS

•High levels of public deficit and debt place an additional burden on monetary policy and undermine Stability and Growth Pact as a key pillar of Economic and Monetary Union

•All countries will be required to meet their commitments under excessive deficit pressures


•Key challenges in order to reinforce sustainable growth and job creation is to accelerate structural reforms

•Sound balance sheets, effective risk management and transparent, robust business models are key strengthening banks and ensuring access to finance

This commentary is similar to what I read int he Fed's Beige Book yesterday. Economic growth will be slow at best. Inflationary pressures remain subdued. The Central Banks will begin to unwind QE and pull some liquidity from the system.

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC

Morning Updates- 03.04.2010

Good Morning fellow market junkies. Today there is a glut of economic data that should and could potentially give the equity markets some type of direction. Today we will see interest rate decisions from BOE and ECB. I will be looking for any type of details on winding down QE programs. Hence, I want to know when liquidity will start to drain from the system. Also, I want to hear ECB commentary on the sovereign debt problems in Greece and elsewhere. Trichet will probably speak to these issues specifically.

Other Notable Economic Data today:

•05:00 Euro Zone GDP (QoQ)

•08:30 ECB President Jean-Claude Trichet Speaks

•08:30 U.S. Initial Jobless Claims- Forecast (475,000 lost)

•08:30 U.S. Nonfarm Productivity (QoQ)- Forecast 6.2%

•10:00 Canadian Ivey PMI- Forecast 55.00

•10:00 U.S. Pending Home Sales- Forecast 1.7%

•10:30 U.S. EIA Natural Gas Report

BOE Rate Decision

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.

Not too much of a surprise here. Minutes will be released on March 17th.

ECB Rate Decision (Update1)

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 1.00%, 1.75% and 0.25% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 08.30 EST today.

I am waiting for some clarity from Trichet before I digest.


link to full Trichet opening comments:

Euro Zone GDP

GDP increased by 0.1% in both the euro area1 (EA16) and the EU271 during the fourth quarter of 2009, compared with the previous quarter, according to first estimates released by Eurostat, the statistical office of the European Union. In the third quarter of 2009, growth rates were +0.4% in the euro area and +0.3% in the EU27.

Compared with the fourth quarter of 2008, seasonally adjusted GDP declined by 2.1% in the euro area and by 2.3% in the EU27, after -4.1% and -4.3% respectively for the previous quarter.

GDP was the weakest in Latvia (-3.2%) and Romania (-1.5%). Estonia had the most robust growth (+2.6%).
Full details:

U.S. Jobless Claims (update 2)

In the week ending Feb. 27, the advance figure for seasonally adjusted initial claims was 469,000, a decrease of 29,000 from the previous week's revised figure of 498,000. The 4-week moving average was 470,750, a decrease of 3,500 from the previous week's revised average of 474,250.

U.S. Non-Farm Productivity (QoQ) (update 4)

Both productivity and costs were revised better than expected for the fourth quarter. Businesses clearly are focusing on cutting labor costs to try to boost profits or cut losses. Nonfarm business productivity was revised up to a sharp 6.9 percent boost from the initial estimate of 6.2 percent. This followed a revised 7.8 percent surge in the third quarter. Today's report includes annual revisions which raised the Q3 figure. The consensus had called for a 6.3 percent revised gain for the latest period. Unit labor costs fell an annualized 5.9 percent in the fourth quarter, compared to an initial estimate of minus 4.4 percent and a revised third quarter plunge of 7.6 percent. The market forecast was for a 4.5 percent drop in costs.

U.S. Pending Home Sales Index (Update5)

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in January, fell 7.6 percent to 90.4 from an upwardly revised 97.8 in December, but remains 12.3 percent higher than January 2009 when it was 80.5.

Lawrence Yun, NAR chief economist, said weather is likely to impact housing data. “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February,” he said.

Nat Gas Inventories (Update 7 last one)
Working gas in storage was 1,737 Bcf as of Friday, February 26, 2010, according to EIA estimates. This represents a net decline of 116 Bcf from the previous week. Stocks were 71 Bcf less than last year at this time and 21 Bcf above the 5-year average of 1,716 Bcf. In the East Region, stocks were 9 Bcf below the 5-year average following net withdrawals of 74 Bcf. Stocks in the Producing Region were 24 Bcf below the 5-year average of 604 Bcf after a net withdrawal of 27 Bcf. Stocks in the West Region were 54 Bcf above the 5-year average after a net drawdown of 15 Bcf. At 1,737 Bcf, total working gas is within the 5-year historical range.

Natural Gas sold off after this report was released.


Foreign Exchange
-EUR is down -0.2775% against the USD @ $1.3657 as of 9:36 EST.
-EUR is up 0.4666% against the JPY at 121.66.
-USD is strengthening against the JPY by 0.6327% @ 89.0650.
-GBP is up against the USD by 17 basis point at $1.5124.

-Gold is down $3.70 sitting at 1139.00/troy ounce
-Silver is off 37 bp @ $17.265/t oz.
-WTI Crude is down $0.56 this morning to $80.31/barrel
-Nat Gas is down @ $4.72/MMbtu


Asia (closed)
-Nikkei 225- off -1.05% @ 10,145.72
-Topix- down 8.01 points to 897.64
-Hang Sang- off -1.44% to 20,575.78
-S&P/ASX 200- down 14.80 point @ 4750.50
-CSI 300- down 84.51 points to 3250.57

-FTSE 100- 5521.31 off -.22%
-CAC 40- 3833.06 down -.25%
-DAX 30- negative by 21.40 points @ 5796.48

United States
-Dow Jones- up 25.32 points @ 10,422.08 (as of 09:30 EST)
-NASDAQ- up .14% @ 2283.94
-s&P 500- up 2.9% to 1121.99

-UST 10 Y- Price: off .035 to sit at 99 30/32 Yield: 3.63%
-Bunds 10 Y- Price: off .047 to 100.89 Yield: 3.14%
-JGB 10 Y- Price: rallied .044 to 100.57 Yield: 1.34%

I will try and Update this throughout the trading day

Good luck trading

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC

Wednesday, March 3, 2010

Nat Gas Trade- 03.03.2010

This Morning I entered into a long UNG position. I had been day trading the stuffing out of this ETF for a while but I took a break to re-evaluate fundamentals and technicals. Alas, I feel the UNG will bounce off of long-term support. I will ride this baby as far as she takes me. More on this trade to come in the future; stay tuned.

"Do you know why Fund Managers can never beat the S&P 500? They're sheep and sheep get slaughtered."


Patrick M. Ambrus
Managing Partner
Analyze Capital LLC

Tuesday, March 2, 2010

Weekly Forecast - Forex, Energy, & Chinese Equities - 03/01/2010


USD is the name of the game.

EUR post 2.26.10 <-- Click Here
EUR post2.25.10 <---
EUR post 2.24.10 <---

Last week we examined EUR/USD movements quite closely. As my consolidated post show I am bearish on the EUR going forward into next week. Most of my arguments come from technical analysis. Though there is plenty of fundamental news to support a weak EUR thesis. Uncertainty looms with the Greek Debt situation, inflation is rearing its ugly head to an extent, and jobs are not getting better in the short run.

Of course this is relative to the US, who have raised discount window rates, and has RELATIVE mild economic (reports, though bearish overall on any accounts). The key being the relative expectation.

I will be updating the blog periodically throughout the week to report on my performance and progress.


1.35 is looking like a strong support/consolidation level, and she be a key indicator moving forward. In a weekly time frame I don't see levels going higher than 1.37 (by friday). I expect prices to trade within a high 1.34 to mid 1.36 range.


Alexander Lê
Managing Partner
Analyze Capital LLC


Crude Outlook


Since January 4th WTI Crude oil has traded between a range of $83.12/barrel reached on January 6th and $71.15 reached on February 5th. That equates to 14% range from peak to trough prices. Today Crude rallied 1.3% to $79.68 a barrel in New York. WTI Crude needs to rally only 4.14% or more in order to reach a new high for 2010. I predict Crude will trade in a range of $74.50-$82.5 until it breaks resistance at $83.12.

Fundamental Analysis

•Crude Oil prices rallied over the past month in large part due to colder temperatures in the Northern Hemisphere.

•A strong United States Dollar has hurt prices in February

•The Chinese central Bank has asked its lenders to boost bank reserve requirements , leading to fears of the Chinese economy overheating

•Global demand for Oil is projected to grow by 800,00 barrels/day for 2010

•Bullishness in the tanker market continued in January and spot freight rates have increased on all routes.

•U.S. commercial oil inventories fell by 3.0 million barrels/day in January to 1.05 million/day

•U.S. commercial oil inventories are 32.0 million barrels/day above a year ago and 61 million barrels/day above the five year average.

•In OECD countries, the recovery has been sluggish and remains largely dependent on fiscal stimulus and Quantitative Easing

•United States CPI Inflation remains low and economists project an increase of only 2% in 2010

Technical Analysis

•As you can see from the USO 3 year daily chart, the 50 and 200 day Simple Moving Averages crossed briefly in July but look to converge once more.

•The tape continues to move inside and outside of the 50 and 200 day SMAs as they may act as near term resistance and/or support.

•RSI might have formed a double top with the first at the end of 2009 and the second top in January 2010.

•Volume has stayed at consistently low levels since the beginning of global asset rally in March of 2009.

Conclusion: The fundamentals for $100 oil are not present, not even 90$ oil. Global Demand is not great as The United States and Euro area continue to slowly drag themselves out of recession. A stronger dollar going forward will not help Crude sustain this high a price range. However, if the Chinese economy continues to grow at 10% annually, expect to see prices stay around $85/barrel.

Prediction: If the USO fails to test $40 (coinciding with a test of $83 for Crude; see above) on this next leg up I would be bearish.


Patrick Ambrus
Managing Partner
Analyze Capital LLC


The Chinese word:

Chinese Stock Index Trend, before & after Spring Festival

2009-10-28 ~ 2010-03-03 - Graph 1

2010-02-01 ~ 2010-03-03 - Graph 2

The first graph above is the candlestick chart of Shanghai Stock Index from Oct 28th, 2009 to Mar 3rd, 2010, whereas the second one shows the trend from Feb 1st to Mar 3rd this year. The Graph 1 shows that the market started recovering at the beginning of February this year, and maintained a growing trend. Due to the traditional holiday: Spring Festival in China, the stock market was closed during Feb 13th ~ Feb 21st. Although the graph shows two slight pullbacks during the first two days after the holiday, the index went back up again quickly and kept a trend as the start of this year in lunar calendar.

2009-10-28 ~ 2010-03-03

2010-02-01 ~ 2010-03-03

MACD graph of the index illustrates the same idea that candlestick chart are telling. The increase in trading volume indicates that investors are much more activate than last year. A buy-in signal appeared right before the market close for Spring Festival, and after moving averages cross, the trading volume and price will become a pretty positive correlated relationship.

Furthermore, most stocks in the market have been following the index closely this year, especially in February. Since the index is having a pretty good trend, it is likely that most stocks will go to a higher price level in March as well. For instance, alternative energy stocks, such as LNRY or HTY for solar energy, have been moving along with the index most of the time. Therefore, if the index sticks to an up trend in the next few weeks, then there is a great possibility that the market will do much better than previous months, because of heavy weighted stocks will move up the index.
Lastly, plenty of positive reactions from investors before and after the holiday have made a great impact on investor sentiment in a good way throughout the year. Nevertheless, March will determine whether the market will become stable with growth or go back down to about 3000pts, where has been trapping investors for quite a long time.


Clark Chu
Managing Partner
Analyze Capital LLC

Monday, March 1, 2010

EUR Update: 3.01.10

60 Min Chart

Daily Chart

Another Month Flying by us:

And as we kick off March the EUR is already trading within my expectations. The trend channels I drew from last week held beautifully. Though the MACD indicator downward trend lines I drew on the Daily chart is now broken though the RSI trendline drawn is holding, it will be interesting to see if price behavior will stay within the given range. I still maintain my forecast from last week; the given ranges are posted the weekly forecast report (being published soon).

At the moment 1.35 support is holding, though we still have the rest of the day to come. Will report back later.


Alexander Lê
Managing Partner
Analyze Capital LLC
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