EUR Update: 2.26.10

EUR Daily: for weekly forecast



EUR 60min for daily (1 week forecast)



My past post here: ---> " 2.25.10 EUR update Said that I expected a whipsaw to high 1.37. Looking at chart one, there seems to be mounting evidence against me. Based of my RSI and MACD trend-line drawings, indicators are meeting the trend-line resistance levels (see red circle highlights).

the 60 Minute chart is showing that morning levels will continue to peak off until the rest of the day and will continue lower. If that is the case a 1.37 (1st SD BB levels) was too far fetched for an entry point on a short and a mid 1.36 range(center line EMA levels) may see more appropriate.

Though, either way, going into next week, short is the correct position in my humble opinion. I also note prices are coming to a squeeze on the daily chart. Trend confirmation will happen. If prices push lower on the squeeze, we will see a revisit to the upper SD BB's and if a piercing of the bands occurs, a down trend will certainly be confirmed for next week.

My forecast will be at least until Wednesday next week we will see a strong USD and weak EUR. At this point there needs to be correction on the RSI and MACD before a continued downtrend can be sustained.


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Alexander Lê
Managing Partner
Analyze Capital LLC
email:analyzecapital@gmail.com

Jobless Claims- 02/25/10

Via Bloomberg:

The number of jobless filing for initial unemployment claims increased in February, pointing to trouble for the February employment report and sending equities and commodities lower in immediate reaction. Initial claims jumped to 496,000 in the Feb. 20 week, the highest level since November. The four-week average, up 6,000 to 473,750, is also the highest since November and is more than 15,000 higher than January levels. In an ominous note for the monthly jobs report, claims offices said heavy weather increased the number of claims in the week. Continuing claims, where data lags by a week, were slightly higher at 4.617 million and are little changed from January levels. The unemployment rate for insured workers is unchanged at 3.5 percent.

Not sure what this report really tells markets. On one hand the weather over the last 2 weeks has caused an increase in claims. However, The U.S. employment is not showing significant improvement month over month. Futures continued to slide after this report was released.

*Update: Equities are selling off to start the trading day in New York.


Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
ambrus.anlzgroup.blogspot.com

Durable Goods Orders- 02/25/10

Via Bloomberg:

The durables report has lived up to its reputation as one of the most volatile indicators. Taking into account upward revisions to December numbers, January numbers look decent. At the headline level, new orders for durable goods in January posted a healthy 3.0 percent gain, following a revised 1.9 percent rebound in December. The December increase had previously been estimated to be 0.3 percent. The latest number topped expectations, compared to analysts' forecasts for a 1.5 percent boost. But we have a different picture for January excluding transportation. Excluding the transportation component, new durables orders fell 0.6 percent after a 2.0 percent gain in December. But the ex-transportation component was revised up for December from the original 0.9 percent rise. Overall, the headline number exaggerates strength but the core number is OK for such a volatile series after the upward revision to December.

Transportation spiked 15.6 percent in January after a 1.5 percent rise the month before. For the latest month, non-defense aircraft (mainly Boeing) surged a monthly 126.0 percent; defense aircraft rose 11.6 percent; and motor vehicles slipped 2.2 percent.

Looking at core components, weakness was rather narrow-most components posted gains. The 0.6 percent dip in durables excluding transportation was led by a sharp 9.7 drop in new orders for machinery after a 7.4 percent rise in December. Also slipping in the latest month was the "all other" component. But gains in the core were widespread with computers & electronics up 4.6 percent and communications equipment rising 3.1 percent. Also improving were primary metals, and electrical equipment. Fabricated metals were flat for January.

Year-on-year, overall new orders for durable goods jumped to plus 10.2 percent in January from minus 1.6 percent the prior month. Excluding transportation, new durables orders improved to up 8.6 percent from up 1.5 percent in December.

Unfortunately this data was offset by a spike in initial Jobless claims.

U.S. Futures @ 9:15 EST
DJIA- off -100.00 to 10,255.00
SPX- down more than 1% to 1091.00
NASDAQ 100- 1796.75 down 17.25 points


Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
ambrus.anlzgroup@gmail.com

EUR update: 2.25.10

The EUR indeed seems to be leading the Major Pair trend (one can play GBP similarly at a more lagged pace via 60min charts) as confirmed by moves into early morning today. One can see my last post LAST POST CLICK HERE<--( and double check on 60min charts).

Prices are coming to squeeze on the BB's which in my opinion will confirm the downward trend (dollar strength). Fundamental news and sentiment confirms point to futures markets to confirmation of relative weaker economies outside the US.

Indicator analysis shows a lack of divergence giving more support to daily down trends. This daily down trend may lead to a more fuller piercing outside the lower 2nd SD BB on the weekly chart which all points to a temporary whipsaw to the upside that maybe see through next week. However, once resistance is retested around high 1.38, the trend will continue to the downside in the daily charts (SMA perfection bearish formation confirmation). Price pressure is certainly still to the downside.

Any correction to the upside should correct the RSI and MACD which will give indication and allowance for further moves to the downside post correction.

Relation to the SPX:

Past few days we have been seeing equities positively reacting in correlation to a strong dollar. If that is the case, SPX will be up short-term from a FX view point. I was more bearish, but once all the key resistance levels were broken, I had to admit I was wrong short term. Longer term out we will reassess our performance on the SPX. at this point I am looking for numbers closer in the high 1100's into the 1200's before hitting signficant resistence.

Morning Update- 02/25/10

Foreign Exchange

-Moody's and S&P warn on Greek Debt downgrade.

-EUR is down -.34% against the USD @ 1.3493 as of 6:27 EST.

-EUR is off -1.23% against the JPY at 120.5350.

-USD is strengthening against the JPY -.86% @ 89.3740



Commodities

-Gold is down $5.30 sitting at 1091.90/troy ounce

-Silver is OFF -1.18% at $15.775/t oz.

-WTI Crude is down $0.48 this morning to $79.520/barrel

-Nat Gas continues to sell-off down 1.15% @ $4.803/MMbtu in early hours



Equities



Asia

-Nikkei 225- off -.95% @ 10,101.96

-Topix- down 4.28 points to 891.41

-Hang Sang- off -.33% to 20,399.57

-S&P/ASX 200- down 54.40 point @ 4594.10



Europe

-FTSE 100- 5344.78 up .03%

-CAC 40- 3710.14 down 15 basis points

-DAX 30- Positive by 6.04 points @ 5621.55



U.S. Futures

-DJIA- lagging by -36.00 to 10,319.00

-S&P 500- 1098.70 down -4.90 points



Bonds

-UST 10 Y- Price: rallied .075 to sit at 99 22/34 Yield: 3.66%

-Bunds- Price: rallied .096 to 101.04 Yield: 3.12%

-JGB- Price: rallied .208 to 99.96 Yield: 1.30%



Economic Reports

-German Unemployment is 8.20%

-Durable Goods U.S. @ 8:30 EST

-Initial Jobless Claims U.S. @ 8:30 EST

-Fed Chairman Bernanke continues his testimony @ 9:00 EST

-Japanese Core CPI YoY @ 18:30

-Japanese Industrial Production @ 18:50

- Japanese Retail Sales @ 18:50





Patrick M. Ambrus

Managing Partner

Analyze Capital LLC

ambrus.anlzgrouo@gmail.com

EUR and GBP update: 2.24.10

EUR lead



GBP - follow?






I would like to say my downtrend prediction was correct over the past few days. However, I apologize for not being more specific on time frames. Considering I was using 60min charts I was referring to downside moves within the week.

The daily chart says should should be a correction to the upside which could take 1 week to happen, though overall the weekly chart shows trend is down.

Key will be looking for higher lows and lower lows. Bollinger Band Analysis has been working decently with these time frames and setups (don't forget i supplement it with far greater analysis and tools; technical and fundamental).

****

Going forward my idea that the EUR is leading the major pair trend will be confirmed by the end of today or into the next day. Refer to the above charts.

****

----

Alexander Lê
Managing Partner
Analyze Capital LLC
email: analyzecapital@gmail.com

Consumer Confidence- 02/23/10

Via Bloomberg:

The consumer's mood is definitely downbeat, a strong indication that the jobs market isn't improving. The Conference Board's consumer confidence index fell back in a surprising and sizable way, down nearly 10 points to 46.0 in February (January revised to 56.5). Expectations, the index's leading component, fell more than 13 points to 63.8 reflecting a sweeping sentiment downturn in income, employment, and business conditions. The expectations index never really got going last year, barely approaching the watershed 80 level, a level consistent in the past with economic expansion.

The trouble in expectations signaled trouble for the present-situation component which dipped into the teens and toward the record lows of the early 80s. The index fell nearly 6 points to 19.4, reflecting pessimism over current business conditions where only 6.2 percent of the 3,000-home initial sample describe them as good. Only a miniscule 3.6 percent describe jobs as currently plentiful with 47.7 percent, up 1.2 percentage points from January, describing them as hard to get. This latter reading, which gets a lot of attention, will raise talk of trouble for February's jobs report.

Note that consumer confidence may have weakened but momentum and recent indications on the retail sector suggest that consumers haven't pulled back their spending, at least yet. The Reuters/University of Michigan consumer sentiment index for February, which edged lower in an initial reading at mid-month, will be posted on Friday.

Wow, disappointing numbers. The Dow rallied about 33 points in early trading on strong earnings from Home Depot. However, when this report hit the market at 10 EST equities and commodities sold off. NYMEX Crude was off 1.84% midday from its highs of $80.31/barrel from yesterday's trading session. Natural Gas continues to sell-off as reports of warmer weather than usual in the Midwest began to circulate this week. Natural Gas is trading at $4.78 per British Thermal Unit down 2.35% at the close of NYMEX trading.


Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
ambrus.anlzgroup.com