Good Morning Traders!
ECB should set the tone for the morning. The Dax is tightly wound (see chart above). The US markets will follow Draghi around the opening… Both the SP and the DOW made all time highs. The Russell is close. There are no indicators that are screaming overbought. The Nazdaq has a three bar triangle breakout formation and can still make a move to retest its previous 120 minute swing high. Most interesting is the chart of the Bunds (see top). The looming question is: when and how will the ECB initiate QE…..The Bunds can made a full retest up, or, drop back into the previous range. Either way, the US credit markets will likely follow.
Also, of key interest: the Eurocurrency – the intraday 480 minute chart show above, shows a ddownsidebreakout. The measured move projects down to 121.50. This would bring it close to MAJOR MONTHLY support. If instead it rallies and closes above 123.70, a major bear trap would have been laid. There are no buy divergences and the trend on all time frames remains down.
The metals are well watched as well, after holiday shenanigans marginal liquid markets. If they are able to take out the weekly spike high, they would look a lot more interesting. otherwise, the weekly charts are less than compelling, and there are no decisive chart formations….just continued “price – time” consolidation.
The most interesting chart is Crude which could be fomring an inverted H and S pattern on the 240 minute charts.
The DAX is within striking distance of contract highs. For index futures, the path of least resistance is still to the upside.
Hang on to your hats for ECB, and if this does not do it, jobs data on Friday should….
Markets in BO Mode: