Dow, S&P Hit Record Highs On Low Volume, No Data May 19, 2015
Lack Of Volume And Data Send Equities To Record highs
This cant be a good sign. Im sure some are elated that stocks have been able to make the push to new highs but I have to admit, not only am I skeptical but actually thinking its an attempt to get the dumb money thats been happily sitting on the sidelines,back in the markets. After all as the smart money is going to need someone to sell to. I think it was best summed up with this statement I found in an article highlighting the record highs as the VIX got slammed.
So – to summarize – US stocks soared relentlessly on no volume to record highs as traders monkey-hammered VIX futures lower… on a day when Bunds were well managed but TSYs traded out of control, FX markets were carnage and commodities whipped up and down like a whore’s drawers…
Funny summary but not really when we think about it. Something is wrong with this picture.
EUR/USD Runs First Push Reversal
With the EUR/USD running the first push down I will be bias for the short today looking first at the Asian highs of 1.1323 to take the entry during London today. Its possible that they run to 1.1366 before a turn so I will be a little cautious. I am suspicious of the conviction below yesterdays lows during Asia so if the lows hold I will be open for the long around the Asian lows or hourly 200 at 1.1294 if I see enough price action to change my bias.
GBP/USD Push Down On USD Sterngth
The push down on the GBP/USD also gets me bias for the next push down today. It also has potential false Asian conviction at yesterdays lows so I will be open for the long from the 1.5636 level. Otherwise I will be looking for the short at either the Asian highs of 1.5662 or above at 1.5685
EUR/JPY Weak First Push
The push on the EUR/JPY barely making the conviction below Fridays lows late in the day does show that its weaker. Typically we see this conviction before London closes for the day so it does increase the probability of a fake out. I will be bias for the short while open for the long here as well. The 135.80 level will be the first place I look to short but a test to 136.22 could also be where they push if they are going to make the next push down. I will be open for the long from 135.44
Forex News Today
News events start with UK inflation data. CPI is expected flat at zero so I expect that a reaction on a miss will be the usual positive if its good and negative if its bad, however a large miss in PPI data could off set or drive the opposite if the miss is bigger. Later the Euro Zone has its CPI expected a flat zero as well. Again the reaction should depend on the size of the miss and should be in line with the direction even if they just run stops. There is also German ZEW Economic Sentiment. Considering it has been more negative three of the last four releases there is a better chance for that again . They are expecting a drop so it may be closer to in line but a disappointment should be Euro negative.
The US has Building Permits and Housing Starts expecting a rise in both. Since they are expecting an improvement then any positive sentiment going into it will be taken back on a disappointment and the move should be bigger.
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