Wednesday, November 9, 2011

Morning Market

The 10 day chart shows the large price drop at the beginning of last week when Greece announced they would put austerity measures to a vote.  Since then, prices have been in a slight uptrend.  However, price are still below highs set a week and a half ago.

The daily chart shows that prices are consolidating around the 200 day EMA.  The shorter EMAs are all rising.  The 10 day has crossed over the 200 day EMA and the 20 is about to do so.  Prices are also using the EMAs as technical support.  In short, this chart has some good, underlying bullish developments.  Recent action is really more a pause than anything else.

The treasury market gapped higher last week in reaction to the Greek situation.  However, for the last week prices have been moving sideways, consolidating just above the EMAs.  And while the EMAs are moving higher, they are tightly inter-twined, indicating a lack of conviction on the part of traders.  This chart also looks like treasury traders are pausing, waiting to see what the next developments are.

The dollar has consolidated just below the 200 day EMA.  Prices are currently entangled with the EMAs and all the shorter EMAs are moving sideways and are intertwined.

All of these charts add up to one conclusion: the markets are pausing.  The Greek vote decision threw a huge wrench into a very tense situation -- one that was not needed especially considering that it appears the EU situation was resolved.  Now traders are relieved that the Greek situation has been somewhat resolved but they are still concerned about the overall economic picture.