S&P 500 - Major Resistance at the 50-Day MA

Major Macro Correlations

Japanese Government Bonds - How high?

Monthly JGBs prices chart shows we are back to the 1998 highs.

So 12 years of deflation and low interest rates and we are right at the same spot. However with the increasing Sovereign Debt risks (PIGS) and the high ratio of government borrowing in Japan how high can JGBs go before bond vigilantes take matters in their hands?

I see USTs are going higher and yields down but in the case of the rising Sov debt risk shouldn't we be seeing bond selloff as investors should demand better yield to compensate them for the default risk?

30y T-Bond breaks Key Resistance at 120. Yield curve is steepening.

30 Year T-Bond broke the Key Resistance level at 120.

That's called Flight to quality.

Weekly chart of the 2Y/10Y Yield Spread shows a mid-term Steepening inside the Long-term Flattening trend channel. Anyway it's a sign of Inflationary pressure in the near future.

The Yield curve is clearly steepening.

AUD/JPY - The Beauty of Trend Channels

While the AUD strength is generally referred to the Gold performance and the high yielding status of the currency and the JPY weakness is generally referred to its 'funding' status and overall Equity Indices' performance - here is a nice chart combining the two:

The AUD/JPY Trend Channel is clearly defined and the 21-Day serves as an obvious navigation tool. While we saw we saw the S&P 1212 highs broken here we can safely assume we are looking for new highs above the 88 level. The longer-term 200-Day MA is also turning up its slope so it only points into confirmation of acceleration of the current trends.

EUR/USD 21/200-Week Dead Cross

While the Greek debt problems remain a key theme the EUR/USD keeps sustaining its losses.

Here is a weekly chart where there are a few important facts about the price action.

First is the down-trend channel that is taking shape and it is just making the picture more clear. The levels to watch on the down side are the Lower Bollinger Band at 1.3028 which is in confluence with the major psychological 'Big Figure' 1.30 and lower are the April '09 lows at 1.2885.

Second there is a 21/200-Week MA Dead Cross which is a bearish signal just confirming the present price action.

All that point to a sustained USD strength ahead and also might suggest that USD/CAD might be in a bottoming pattern around the Parity level.

GS - 12% plunge

Goldman Sachs after the lawsuit initiation: "

via StockCharts.com

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