The USD/JPY Manifests A Lollipop At Pivot Point Resistance
Wednesday, 27. August 2008, 17:31:37
An early morning stock market report
The Dollar carry trade unwound in early morning trading
FXStreet.com reports that during the night, USD/JPY had fallen lower, but immediately before stock market opening it gapped higher to manifest a lollipop at pivot point resistance at 109.5150.
The ActionForex article Yen Lower after Strong US Durables, Dollar Pressured by Oil shows a downtrending USD/JPY.
Tody, ActionForex joined the litany of analysts who are now bearish on the USD/JPY. In article USD/JPY Mid-Day Outlook considering bearish divergence condition in daily MACD, break of 106.04 support and sustained trading below the trend line support (99.57, 103.75, now at 106.47) will argue that whole medium term rebound from 95.77 has completed. Focus will then be turned back to 103.76 support and break will confirm this case and turn outlook bearish again.
This caused oil, USO, and gold, GLD, to pop higher.
Kitco.com reports that gold is trading up $3 to $627.
Peter, the Active Investor, in article Gold Set For Major Move Higher provides this chart of $gold which shows the August 15, 2008 spike down in gold, which terminated the US Dollar Rally. The chart shows strong resistance for gold at $840 and support for gold at $790.
The unwinding of the dollar carry trade caused a pennant to form in the metal and manufacturing stocks, XME, as well as in the HUI Indexed precious metal mining shares, GDX, the flagship stock here is Barrick Gold, ABX. Prices are usually resolved down from such patterns. I encourage an investment in gold as there is a definite observable 'investment demand for gold'. I strongly discourage investment in gold mining stocks as they have been disconnecting from the price of gold ever since the Citigroup CDO Bust of October 8, 2007.
Independent oil and gas producers, that is the Dow Jones US Oil and Gas, IEO, such as Cabot oil and Gas, COG, moved higher on higher oil, USO, and natural gas, GAZ, prices.
Home construction, XHB, rose 3% on the durable goods order report which Timothy R. Homan of Bloomberg reports Orders for Durable Goods in U.S. Unexpectedly Gain
The Russell 2000 Value shares, IWN, rose relative to the Growth shares, IWO ... IWN:IWO.
The Yahoo Finance 5 day chart of the Russell shows its rise from yesterday's 72.17 to trade at 73 which is a 1% rise, compared to the overall market rise of 0.6%.
The upward vibrancy of the Russell 2000 epitomizes the bullishness of the current market, or what could better be described as day trading speculation. This can be seen in the chart article by Tim Knight: Has June 16th Returned?
Trading in UUP suggests that the Dollar Rally is over.
At opening, UUP turned down from yesterday's close of 23.92 to trade lower.
Stockcharts.com shows UUP closed at 23.85
Yesterday's close of UUP was retracement to the September 24, 2008 value of 23.85, as seen in the Yahoo Finance one year chart of UUP -- immediately before the October 8, 2007 Citigroup CDO Bust.
The 5 day Yahoo Finance chart of UUP shows gold, GLD, up; and UUP, down. The Stockcharts.com chart of UUP shows a fall lower to 23.85. These facts suggest that the Dollar Rally is history.
The Stockcharts.com chart or the US Dollar, $USD, shows how the US dollar has made full retracement and has manifested a doji at 77.26 yesterday August 26, 2008, and that this was Peak Dollar; or August 15, 2008 at 77.15 was peak Dollar.
The PFX Global chart of the $US Dollar index shows 100% retracement has been made.
Greg Michalowski in FXDD article The Dollar Sells Off As Oil Rises After Weekly Oil Data, suggests that the Dollar Rally is over.
Here is the INO chart of the US Dollar Index DX which suggests that Peak Dollar occurred August 15, 2008 or yesterday August 26, 2008.
The unwinding yen carry trade retraced
Stockcharts.com reports that the EUR/JPY, FXE;FXY rose, taking FXI and EEM higher, and forcing FXP and EEV lower.
ActionForex in article EUR/JPY Mid-Day Outlook covers the up in the EUR/JPY.
The EUR/USD rose
Greg Michalowski in FXDD article EURUSD At The 100 and 200 Hour MA Again shows the Euro, FXE, falling which assisted in taking FXI and EEM higher.
ActionForex in article EUR/USD Mid-Day Outlook shows the up in the EUR/USD.
The US Treasuries fell and the marketplace interest rate on US Government bonds rose
TLT fell to 93.5
The interest rate on the 30 year US government bond, $TYX, rose.
Volatility fell
Volatility, $VIX, fell as stocks drifted higher. Those invested in volatility are failing to see the risk of a sharp downturn.
Another acquisition of a US company by a Japanese company was announced
Ricoh Company, Ltd, announced that it will acquire IKON Office Solutions, Inc, IKN.
Patrick Rial in Bloomberg article Japan Goes on Buying Spree, Shrugging Off '80s Bubble
reports that "Japanese companies are increasing overseas acquisitions, using their cash-hoards to snap up assets beaten down by the global credit crisis and economic slowdown.
The value of foreign purchases by Japanese companies this year has already topped 2007's total by 91 percent, according to data compiled by Bloomberg. That's the biggest gain among the world's 10 largest markets and contrasts with fewer deals in the U.S. and U.K., where credit is drying up after the subprime rout".
Elaine Meinel Supkis writing in article 1930 All Over Again relates: "I have hammered away at this topic for several years. Japan has NOT been in a depression at all. Japan's workers are being repressed. This is different from a depression. Depressions hit banks, businesses, etc. Japan's businesses at the top are roaring ahead. They had more growth this last 8 years than in their entire history. Japan is a RIVAL. And is working on her own behalf as all rivals are prone to do. Instead of reacting to this, the US has rolled over, dead. We cannot be allowed to understand this. Israel's economy is growing like gangbusters. And so has Japan's export markets. Both have huge surpluses with the US. Both use the US for their own ends. Both are buying out the US. And both are 'untouchable'. As we go broke, they come in with checkbooks and buy us out. This is NOT A GOOD THING. IT HAS TO BE STOPPED"
Briefing.com provides the early morning report
At 10:00 AM "The stock market fluctuates near the unchanged mark in a tight range. Four of the ten economic sectors are posting a gain.
The energy sector (+1.5%) is posting the largest advance, lifted by the gain in crude prices. Material stocks (+0.6%) are also performing well, with commodities as a whole rising 1.5% as the dollar slips 0.5%.
Consumer discretionary (-0.5%) and healthcare (-0.6%) are the worst performing sectors.
Amylin Pharmaceuticals (AMLN 23.09, -4.15) is weighing on healthcare, after it and partner Eli Lilly (LLY 46.64, -0.38) announced that there have been four additional deaths of patients taking the diabetes drug Byetta. Separately, Bristol-Myers Squibb (BMY 21.31, -0.67) and Pfizer (PFE 19.00, -0.27) are lower after results from a phase three study of Apixaban, an anti-clotting drug, did not meet expectations.
Oil prices will remain in focus, with the government to announce its weekly energy report at 10:35 ET".
At 10:35 AM "The Department of Energy just reported that crude oil inventory levels for the week ended Aug. 22 fell 177,000 barrels. Analyst forecast an increase of 1.1 million barrels. Gasoline stockpiles fell 1.2 million barrels. Crude prices were up 1.8% to $118.31 per barrel just prior to the release.
The major indices had rebounded into positive territory thanks to mostly broad-based buying interest and then hold near highs upon the release of the energy data. Nine of the ten sectors are posting a gain. Energy (+1.5%) and telecom (+1.4%) are leading the way. Only healthcare (-0.2%) remains in the red."
End of Day Update
Loss leaders for the day were EEV and FXP.
UUP closed the day lower at 23.84.
The chart objective. through retracement, of Volatility, $VIX, appears to be $18.60; if obtained this could drive gold down to $790 again.
FXStreet provides the chart of the EUR/JPY, EUR/USD, and USD/JPY; the last of which closed at its pivot point of 109.54. When the USD/JPY cuts loose and falls lower the US Dollar, $USD, is really going to take a tumble and gold will rise in value.
Until then, the gold ETF, GLD, and the HUI indexed precious metal mining ETF, GDX, finished the day in pennant patterns; prices usually fall from such, especically the metals. Gold could easily fall lower before the stocks fall lower.
Tim Paradis of the Associated Press reports that wall Street posted a big advance after the government reported a larger-than-expected increase in orders for big-ticket manufactured goods that indicated the economy is stronger than many investors thought.
The Russell 2000, IWM, closed up at 73.14.
The US Dollar, $USD, closed at 77.02 manifesting a lollipop hanging man candlestick Chart of $USD
Gold, $GOLD, closed at $826 Chart of $GOLD
Ongoing Charts
The Yahoo Finance 5 Day Ongoing Chart of UUP and GLD Peak Dollar either occurred on August 15, 2008 when UUP closed at 23.93, or yesterday, August 26, 2008, when UUP closed at 23.92.
The INO 5 Day Ongoing Chart of Gold
The PFX Global Ongoing Chart of Gold
The INO 3 Day Ongoing Chart of the US Dollar Index DX
The PFX Global Ongoing Chart of The US Dollar Index
The daily ongoing Stockcharts.com chart of the US Dollar, $USD suggests that Peak Dollar occurred on August 15, 2008 with a price of $77.15 or yesterday August 26, 2008 at 77.26.
The FXStreet Hourly Ongoing Chart of the USD/JPY
The PFX Global Ongoing Chart Of The uSD/JPY
The Yahoo Finance 5 day ongoing chart of transportation stocks, IYT, and oil, USO
The Yahoo Finance 5 day ongoing chart of the Russell 2000, IWM, and the financial sector, IYF
The Yahoo Finance 5 day ongoing chart of SKF
The ongoing Stockcharts.com chart of EUR/JPY -- FXE:FXY
The ongoing Stockcharts.com chart of world stocks, EFA
The ongoing Stockcharts.com chart of China stocks, FXI
The ongoing Stockcharts.com chart of the Russell 2000, IWM
Caveat
I am a blogger who writes on the investment demand for gold; I suggest that before anyone make an investment decision, that one consult with a licensed investment professional.
Suggested Reading
8/26/2008 Market Analysisby The Titans Of Wall Street who relates: "I can see that I should be more bearish than neutral"
Financials Face Massive Credit Hurdle by The Financial Ninja
Higher Levels of 'Troubled Banks' as Financial Earnings Plummet by Jesse
The Dollar carry trade unwound in early morning trading
FXStreet.com reports that during the night, USD/JPY had fallen lower, but immediately before stock market opening it gapped higher to manifest a lollipop at pivot point resistance at 109.5150.
The ActionForex article Yen Lower after Strong US Durables, Dollar Pressured by Oil shows a downtrending USD/JPY.
Tody, ActionForex joined the litany of analysts who are now bearish on the USD/JPY. In article USD/JPY Mid-Day Outlook considering bearish divergence condition in daily MACD, break of 106.04 support and sustained trading below the trend line support (99.57, 103.75, now at 106.47) will argue that whole medium term rebound from 95.77 has completed. Focus will then be turned back to 103.76 support and break will confirm this case and turn outlook bearish again.
This caused oil, USO, and gold, GLD, to pop higher.
Kitco.com reports that gold is trading up $3 to $627.
Peter, the Active Investor, in article Gold Set For Major Move Higher provides this chart of $gold which shows the August 15, 2008 spike down in gold, which terminated the US Dollar Rally. The chart shows strong resistance for gold at $840 and support for gold at $790.
The unwinding of the dollar carry trade caused a pennant to form in the metal and manufacturing stocks, XME, as well as in the HUI Indexed precious metal mining shares, GDX, the flagship stock here is Barrick Gold, ABX. Prices are usually resolved down from such patterns. I encourage an investment in gold as there is a definite observable 'investment demand for gold'. I strongly discourage investment in gold mining stocks as they have been disconnecting from the price of gold ever since the Citigroup CDO Bust of October 8, 2007.
Independent oil and gas producers, that is the Dow Jones US Oil and Gas, IEO, such as Cabot oil and Gas, COG, moved higher on higher oil, USO, and natural gas, GAZ, prices.
Home construction, XHB, rose 3% on the durable goods order report which Timothy R. Homan of Bloomberg reports Orders for Durable Goods in U.S. Unexpectedly Gain
The Russell 2000 Value shares, IWN, rose relative to the Growth shares, IWO ... IWN:IWO.
The Yahoo Finance 5 day chart of the Russell shows its rise from yesterday's 72.17 to trade at 73 which is a 1% rise, compared to the overall market rise of 0.6%.
The upward vibrancy of the Russell 2000 epitomizes the bullishness of the current market, or what could better be described as day trading speculation. This can be seen in the chart article by Tim Knight: Has June 16th Returned?
Trading in UUP suggests that the Dollar Rally is over.
At opening, UUP turned down from yesterday's close of 23.92 to trade lower.
Stockcharts.com shows UUP closed at 23.85
Yesterday's close of UUP was retracement to the September 24, 2008 value of 23.85, as seen in the Yahoo Finance one year chart of UUP -- immediately before the October 8, 2007 Citigroup CDO Bust.
The 5 day Yahoo Finance chart of UUP shows gold, GLD, up; and UUP, down. The Stockcharts.com chart of UUP shows a fall lower to 23.85. These facts suggest that the Dollar Rally is history.
The Stockcharts.com chart or the US Dollar, $USD, shows how the US dollar has made full retracement and has manifested a doji at 77.26 yesterday August 26, 2008, and that this was Peak Dollar; or August 15, 2008 at 77.15 was peak Dollar.
The PFX Global chart of the $US Dollar index shows 100% retracement has been made.
Greg Michalowski in FXDD article The Dollar Sells Off As Oil Rises After Weekly Oil Data, suggests that the Dollar Rally is over.
Here is the INO chart of the US Dollar Index DX which suggests that Peak Dollar occurred August 15, 2008 or yesterday August 26, 2008.
The unwinding yen carry trade retraced
Stockcharts.com reports that the EUR/JPY, FXE;FXY rose, taking FXI and EEM higher, and forcing FXP and EEV lower.
ActionForex in article EUR/JPY Mid-Day Outlook covers the up in the EUR/JPY.
The EUR/USD rose
Greg Michalowski in FXDD article EURUSD At The 100 and 200 Hour MA Again shows the Euro, FXE, falling which assisted in taking FXI and EEM higher.
ActionForex in article EUR/USD Mid-Day Outlook shows the up in the EUR/USD.
The US Treasuries fell and the marketplace interest rate on US Government bonds rose
TLT fell to 93.5
The interest rate on the 30 year US government bond, $TYX, rose.
Volatility fell
Volatility, $VIX, fell as stocks drifted higher. Those invested in volatility are failing to see the risk of a sharp downturn.
Another acquisition of a US company by a Japanese company was announced
Ricoh Company, Ltd, announced that it will acquire IKON Office Solutions, Inc, IKN.
Patrick Rial in Bloomberg article Japan Goes on Buying Spree, Shrugging Off '80s Bubble
reports that "Japanese companies are increasing overseas acquisitions, using their cash-hoards to snap up assets beaten down by the global credit crisis and economic slowdown.
The value of foreign purchases by Japanese companies this year has already topped 2007's total by 91 percent, according to data compiled by Bloomberg. That's the biggest gain among the world's 10 largest markets and contrasts with fewer deals in the U.S. and U.K., where credit is drying up after the subprime rout".
Elaine Meinel Supkis writing in article 1930 All Over Again relates: "I have hammered away at this topic for several years. Japan has NOT been in a depression at all. Japan's workers are being repressed. This is different from a depression. Depressions hit banks, businesses, etc. Japan's businesses at the top are roaring ahead. They had more growth this last 8 years than in their entire history. Japan is a RIVAL. And is working on her own behalf as all rivals are prone to do. Instead of reacting to this, the US has rolled over, dead. We cannot be allowed to understand this. Israel's economy is growing like gangbusters. And so has Japan's export markets. Both have huge surpluses with the US. Both use the US for their own ends. Both are buying out the US. And both are 'untouchable'. As we go broke, they come in with checkbooks and buy us out. This is NOT A GOOD THING. IT HAS TO BE STOPPED"
Briefing.com provides the early morning report
At 10:00 AM "The stock market fluctuates near the unchanged mark in a tight range. Four of the ten economic sectors are posting a gain.
The energy sector (+1.5%) is posting the largest advance, lifted by the gain in crude prices. Material stocks (+0.6%) are also performing well, with commodities as a whole rising 1.5% as the dollar slips 0.5%.
Consumer discretionary (-0.5%) and healthcare (-0.6%) are the worst performing sectors.
Amylin Pharmaceuticals (AMLN 23.09, -4.15) is weighing on healthcare, after it and partner Eli Lilly (LLY 46.64, -0.38) announced that there have been four additional deaths of patients taking the diabetes drug Byetta. Separately, Bristol-Myers Squibb (BMY 21.31, -0.67) and Pfizer (PFE 19.00, -0.27) are lower after results from a phase three study of Apixaban, an anti-clotting drug, did not meet expectations.
Oil prices will remain in focus, with the government to announce its weekly energy report at 10:35 ET".
At 10:35 AM "The Department of Energy just reported that crude oil inventory levels for the week ended Aug. 22 fell 177,000 barrels. Analyst forecast an increase of 1.1 million barrels. Gasoline stockpiles fell 1.2 million barrels. Crude prices were up 1.8% to $118.31 per barrel just prior to the release.
The major indices had rebounded into positive territory thanks to mostly broad-based buying interest and then hold near highs upon the release of the energy data. Nine of the ten sectors are posting a gain. Energy (+1.5%) and telecom (+1.4%) are leading the way. Only healthcare (-0.2%) remains in the red."
End of Day Update
Loss leaders for the day were EEV and FXP.
UUP closed the day lower at 23.84.
The chart objective. through retracement, of Volatility, $VIX, appears to be $18.60; if obtained this could drive gold down to $790 again.
FXStreet provides the chart of the EUR/JPY, EUR/USD, and USD/JPY; the last of which closed at its pivot point of 109.54. When the USD/JPY cuts loose and falls lower the US Dollar, $USD, is really going to take a tumble and gold will rise in value.
Until then, the gold ETF, GLD, and the HUI indexed precious metal mining ETF, GDX, finished the day in pennant patterns; prices usually fall from such, especically the metals. Gold could easily fall lower before the stocks fall lower.
Tim Paradis of the Associated Press reports that wall Street posted a big advance after the government reported a larger-than-expected increase in orders for big-ticket manufactured goods that indicated the economy is stronger than many investors thought.
The Russell 2000, IWM, closed up at 73.14.
The US Dollar, $USD, closed at 77.02 manifesting a lollipop hanging man candlestick Chart of $USD
Gold, $GOLD, closed at $826 Chart of $GOLD
Ongoing Charts
The Yahoo Finance 5 Day Ongoing Chart of UUP and GLD Peak Dollar either occurred on August 15, 2008 when UUP closed at 23.93, or yesterday, August 26, 2008, when UUP closed at 23.92.
The INO 5 Day Ongoing Chart of Gold
The PFX Global Ongoing Chart of Gold
The INO 3 Day Ongoing Chart of the US Dollar Index DX
The PFX Global Ongoing Chart of The US Dollar Index
The daily ongoing Stockcharts.com chart of the US Dollar, $USD suggests that Peak Dollar occurred on August 15, 2008 with a price of $77.15 or yesterday August 26, 2008 at 77.26.
The FXStreet Hourly Ongoing Chart of the USD/JPY
The PFX Global Ongoing Chart Of The uSD/JPY
The Yahoo Finance 5 day ongoing chart of transportation stocks, IYT, and oil, USO
The Yahoo Finance 5 day ongoing chart of the Russell 2000, IWM, and the financial sector, IYF
The Yahoo Finance 5 day ongoing chart of SKF
The ongoing Stockcharts.com chart of EUR/JPY -- FXE:FXY
The ongoing Stockcharts.com chart of world stocks, EFA
The ongoing Stockcharts.com chart of China stocks, FXI
The ongoing Stockcharts.com chart of the Russell 2000, IWM
Caveat
I am a blogger who writes on the investment demand for gold; I suggest that before anyone make an investment decision, that one consult with a licensed investment professional.
Suggested Reading
8/26/2008 Market Analysisby The Titans Of Wall Street who relates: "I can see that I should be more bearish than neutral"
Financials Face Massive Credit Hurdle by The Financial Ninja
Higher Levels of 'Troubled Banks' as Financial Earnings Plummet by Jesse
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