Good Morning Traders. Overnight during the Asian session we saw The Nikkei 225 slide by the most in eight months, this mood slipped into the Chinese market with shares sliding there for the first time in three days. From a technical perspective the MSCI Asia Pacific RSI reached a value of 75 yesterday, any level above 70 is considered as a sign that the market is overbought. The Yen has also begun to make gains against some of the currency pairs over the last few days after the Japanese Policy makers stated that they would like to see the USD/JPY around the 89.00-88.00 level.
Overnight we saw the EURUSD remain stuck in a tight range, the pair reached a high of 1.33200 but at the time of writing it sits at 1.32877. From a technical perspective the psychological 1.33 level has been breached, if we fail to get back above this level we could see the pair make its way back toward 1.30-1.31 levels.
The mood is the market this morning looks to have changed, US Equity Futures are in the red this morning (DOW -.25%, SPX -.27%). Failure yesterday to make new highs in the SPX yesterday and the change of mood in the EURUSD pair may flag to some traders that the New Year rally may in fact have run its course. Today is a big day on the earnings calender with some of the large US banks reporting ( JP Morgan, Goldman Sachs, Bank of New York) so profit taking ahead of these releases would not be surprising.
We have seen Apple break the major $500 technical support level that had held for the past month, that level is now in the past as Apple sits at $485 in the pre-market with $420-400 as next targets. Be aware that if you are trading the SPX Apple accounts for 3% of the index and if you have an interest in the NASDAQ in accounts for 10% of the index.
Bulls beware, its looks like the bears may have entered the market.
Happy Trading
@lowkeycapital
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