Yesterday's Market

Considering the market's overall technical condition, we'll need a few days worth of price action in a variety of markets in order to say things are OK. However, yesterday was a good start in that direction.

Let's start with the equity markets.


Prices gapped lower at the open (a) but rallied throughout the day. Prices initially rallied to just below the 50 minute EMA (b) then corrected in a downward sloping channel (c). Prices then rallied strongly into the close (d) printing a very strong volume bar (e) at the end.


The Treasury market has rallied as the stock market has fallen - basically batching a flight to safety bid. Yesterday prices gapped higher at the open (a), then went into a down (b), up (c) down (d) pattern. However, the last leg down (d) had a volume surge, indicating a higher amount of participants getting out of the market.



The dollar has also benefited from a flight to quality at the expense of the euros fall. However, yesterday after gapping higher, the dollar continued to move lower, finding upward resistance at various EMAs (a, b, c) throughout the day. Also note that momentum was moving lower throughout the day (d).

Currencies are at the center of recent market turmoil. As the euro has fallen, the dollar as risen, leading to a drop in commodity prices. However, it's possible we're nearing a turning point.


For the dollar, momentum is close to giving a sell signal (b) and the A/D line has dropped (c) indicating a move from the ETF. However, the EMA and price picture are still very bullish.



For the euro, the MACD is close to giving a buy signal (a) and we're seeing money flow back into the security (b).