Wednesday, November 10, 2010
Yesterday's Market
Prices dropped at the open (a), but then formed a strong rally for the rest of the day (b). Notice that prices consolidated in a triangle right after their bottom (c) and two other downward sloping pennant patterns.
Prices on the SPYs are moving lower, looking to find support at the 10 day EMA.
Treasuries moved a bit higher at the open (a), but soon moved lower (b), consolidating losses at two junctures (c and d). Prices rallied in the afternoon (e), after which they also consolidated gains (f and g).
The long-end of the Treasury curve has is still below the 200 day EMA, having broken the lower trend line of the downward sloping pennant pattern (a).
The dollar was in a rally for over a day (a), consolidating gains at several junctures (b, c and d). After topping out yesterday morning (e), they moved lower (f), but consolidated losses at the end of trading (g).
The dollar doesn't really have a clear pattern right now. Prices are conglomerating around the 10 and 20 day EMAs. The 10 and 20 have both moved higher, but this is an initial move and needs a great deal of confirmation. The spike in volume indicates a possible selling climax, but with the Fed buying Treasuries, it's hard to see a real reason for a strong rally, save a counter-trend rally.