TRADING PATTERNS

US Dollar Index (DX) reversal based on the AB=CD pattern

USDX Weekly chart suggest we have a completed AB=CD pattern that implies a reversal into USD strength with immediate target 79-80.

Stock Market Momentum is topping

My previous target 2950 on Shanghai Composite (http://constellation1976.blogspot.com/2010/10/shanghai-composite-momentum-persists.html) has been met and actually exceeded. Think momentum is Topping here and I expect a rise in Volatility.

S&P still manages to squeeze higher but Momentum is waning.

VIX is like we live in bliss and economy is alright. My assumption is hang there for a while and Volatility spikes higher as some 'fundamental' data or other theme surfaces again. Be it QE2 disappointment, another debt problem or political tension - there is always something to blame for the price action. If anyone cares.

USD/JPY and the 20-MA

The 20-MA works like a Clockwork, especially on the USD/JPY.

Pay special attention to those long shadows on the Candles.

S&P at Resistance - Reversal after QE disappointment?

What we have here?

Candle pattern says Shooting star followed by a Hammer - do we have a signal - I assume at least caution here but we gotta hear what Mr. Bernanke has to tell markets at this critical junction.

10Y Note /30Y Bond Divergence - Signs of Weakness

10Y Note made Higher High however 30Y Bond might be signalling weakening in the trend of the Fixed Income market which is evident in the Momentum readings.

I could not know if bond vigilantes are rejecting owning a 30Y paper at the current low yields or the FED has more power in suppressing the short to medium term (2-10Y) yields however I take this DIVERGENCE as a sign of pending trend weakness.

Reuters/Jefferies CRB Index near its 200-Week MA

Weekly chart shows CRB is on a Breakout mode and near its 200-Week MA.

Momentum is rising and trend strength is slowly kicking in.

Inflationary times are coming and judging from the chart they will have a long way to go.