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QE

USDJPYSince there is no change in FED's policy, ie no review or postponing of the QE end date, in other word, FEd is keeping the tapering schedule, interest rate will not rise one to a sudden, at least not before 1Q15, we can expect 101.5 to remain an important support level and 103.5 an important resistance level. If FEd increase its interest rate, we may se a move above 103.5. If BoJ fulfill its 2% inflation target, we may see a move bellow 101.5. In the mean time, the channel is between 101.5 and 103.5 . you can see my studies 11 days ago. Nothing has changed.
Long
by Pashabxl
XAUUSD:There may be room until 1280 but overall target 1240-1180After the fall of EUR against USD, and the announcement of ECB with regard the interest rate, there has been a little move up on GOLD. It could also be interpreted as an upside technical correction because of the very low level of the indicators such as STOCH, William%R or even RSI. Having said that, although there may be a little room on the upside towards 1275-1280, the overall perspective remain on the downside with 1240- 1220 and 1180 as headline goals.
FX:XAUUSD
by Pashabxl
CAC: Correction start to be initiated. Target 4320-4050CAC has started to initiate the technical correction I have forseen for the last weeks. The process has been slow because of ECB's intervention, the expectation raised before and the political situation in France. Indicators show clearly that we are in an overbought level and the correction process has started. Fibo retracement could be used as target and support level. 4466, 4386, 4321, 4250, 4170 and 4050 may very be the next target. When CAc arrives to each target, we may face a little correction on the upside if the market arrvied at that support level in a oversold situation, but the headline goal appears to remain between 4150 and 4000.
INDEX:CAC40Short
by Pashabxl
SPX: Clearly overbought. A correction is still imminentSPX has faced a very long, quick raising trend. The Raising Wedged didn't break with a pull back, but to the contrary with a second raising wedge on the upside. A normal raising wedge would break up on the downside with a pull back correction. But we do hevae a raising wedge within a raising wedge. This is the outcome of too optimistic political statement about the state of play with regard world economy, ECB announcement of a possible European QE which contradict with the first political statement that economy is well. But market has bought excessively the announcement. Now there is almost no more buyer in the market and the buyers will soon have to leave the floor for the sellers. If you do compare in generale the power and the speed of the growing Bull market and a Bear market, we generaly go in a more slow motion upwards, and we do fall down very quickly on the downside.Therefore, based on the power of the sellers, we may face a smooth correction towards 1880, or a rather normal "typical" sale in May mood which menas that the correction may be very much towards 1790 or a real change of trend which means around 1680-1650. Now we have to wait and see. But the tradition of Sell in may buy in September appears to be one more time dead, or at least null and non void, because of the situation of the market. Do not forget that the market is biased because of the virtual imput such as FEd's QE, or the intervention of Central Banks such as BoJ, ECB and others. Therefore we are not in a normal competitive market like we use to be between 1990 and 2004 but rather in a market where Central Banks are heavily making interventions. Therefore natural and mechanical forecast became rather more difficult. But don't forget that at the end of the day, market and traders are making the market despite everything. ;-)
SP:SPXShort
by Pashabxl
1
EURUSD: Toward a last try to 1.37XXXEURUSD has respond to ECB decision to lower the interest rate. The decision was already known. Market anticipate the decision and from 1.3980, Euro went down to 1.372 and then 1.3502. ECB confirmed its decision to lower the interest rate, and now the market is in a kind of political equilibrium, but not yet in an equilibrium between BULL and BEARS. Indicators show clearly that we are at an oversold level. Therefore, there will "normally" go into a corrective trend towards 1.36, then 1.3660, above that level, it may be the dynamic and the last try of BULLS against BEAR and the market may very well try to hit towards 1.372. And if we do bare in mind that during summer time, there is a respectable balance between USD spent by tourist vs Euro spent by tourist, although it has a marginal effect, The ultimate target may still be 1.38 or even 1.385. But overall, after the last try, Euro should go down towards 1.35, and then 1.33 and even bellow in order to trade between a range of 1.33 and 1.29 because of the tappering olicy of FED, ECB low interest rate, the end of FED's QE3 etc. Yesterday, I have published the latest state of play with regard EURUSD pair and the trend remain still the same unless there is a major change in the market.
Long
by Pashabxl
1
VIX: All time Low, and no one knows why?If World economy was good, ECB wouldn't think about putting into the market a European QE, nor would it plan any ABS or LTRO. ECB wouldn't lower the interest rate that low, even on the negative side in order to push the banks to give loans which bank do not give. They do prefer to earn money from the market through options, warrants, turbo calls etc. Unemployment statistics are not good in Europe and nor convincing in the US. No proper growth perspective that would create a certain stimulus for job creation. Despite this, the volatility index is very low, too low as the indicators show clearly, and above all, the indexes are really too high. Therefore, this overconfidence is just virtual with no ground, no reality. Long would be the only appears to be the safe side of the market.
CBOE:VIXLong
by Pashabxl
2
DAX: Towards an obvious correction before All time highThis study has been drawn on a weekly chart. My forcast regarding DAX since QE3 i.e September 2012 was 9706 and I have mentioned it many times in my previous studies. I still consider that as of now, and above 9706, we are at an illusive and exessive level, this is also confirmed by the STOCH and you can even ad RSI or W%R. Nevertheless, I am not the marketmaker, and market decided that there was still room and confidence and money to go above that level. We may very much hit 10000+ today just for the fun, in order for trader to say that they have witness that level. However, ECB PResident made a clear statement today about the futur prospect of the EU Economy and perspective are not nice. That is why, in order to boost the economy and the inflation, ECB decided to lower its interest rate and announced that it is preparing a QE package. It is still too early to know when it will be launch as well as the amount, but I've heard from ECB people and ECB watchers, is that this will be launch between September 2014 and MArch 2015 and the amount might be between 800 Bil and 1000 Billion Euros. This will need to be confirmed by the time. Nevertheless, at the present level, DAX will face a technical correction from this overbought level. This correction may be in two phases before DAX get on track for the all time high perspective. The first correction target may very much be 9382 a Fibo level as seen on the chart, and the second one after a little pull up to 9050-9000. This is a 10% correction before ECB's QE, the end of FED's tappering program and the new stimulus package. The market will have to acknoledwege at least a correction if not the real shape of the European Economy which is not that bright.
INDEX:DEU40
by Pashabxl
CAC40: ECB interest rate decision+CorrectionECB President was very clear. There is yet no sign of growth in Europe and worst, a risk of deflation. Refi interest rate has been lowered, and even on the deposit rate, ECB decided to go to a negative rate, like BoJ did in the past. One can think that money withdrawn from the saving accounts would go on the market, but the market is very week, with no growth prospect. CAC40 has been artificialy very high with no reason. QE3 is coming to an end and there is no plan to delay the tappering. On the other hand, the gentle end of FEd's QE3 and the eventual European Central Banks QE based on ABS as I have mentioned in the past can force us to think that, CAC40 will first face a 3 phase correction. Then when ECB will announce in September the readiness of the institution to launch a European QE, CAC40 will smoothly start to go up again, virtualy and artificialy with 5500 or 6000 as a headline goal. the trading plan is being made. But for the time being, the correction may be done in 3 phases. Phase 1 the objective is 4400, Phase 2, after a little pull back, the objective may very much be 4200, and phase 3 should go as low as 4000. After that level, we can consider ourself in a double bottom pattern, or a falling wedge. Double bottom at around 4000 may very much be the chart we would see at the end of the 3rd phase. But all this is to be followed...
INDEX:CAC40Short
by Pashabxl
1
EURUSD. What next? The round has been won by those who thought that ECB will intervene, and mechanically EUR loose ground against USD. ECB either intervene next June 4th by lowering interest rate or announcing a QE and EUR will continue to loose ground against USD and the phenomena would face an impetus when FED raised its interest rate, or if it keep its schedule with regard Tappering. Or ECB do not intervene saying that it is too early, and therefore, EUR raises high against USD and towards 1.40 again. Finaly, ECB do not intervene, EUR grow up high an the market force ECB President to intervene after June 4th sometimes before end of June.... Let's watch and see.
by Pashabxl