Good Afternoon,
Technically, when you have an open, high, low, close bar and the closes can very rarely close on the low of the bar, you have buyers lurking. This reminds me of the trading pits, when buyers would put their hands up stopping and reversing any of the selling pressure. You can see it and you can feel it! The bars give you the same clues as the pits - you can see it and feel it! That is "feeling the trade". I have said that the risk is to the upside and Fed and fundamentals aside, the technicals told us that. Quite simply, there are more buyers than sellers!
Fundamentally though, the Central Banks are all in it together, singing the same song. Fundamentally, the data is coming out positive - the labor picture was better than expected today with a great weekly claims number. Manufacturing data was also positive. So as I have said, good data or bad data, it is all good for equities. We have the employment tomorrow. Are we going to get another move to the upside as risk is "off" on Friday's as Friday's have seen huge equity gains. Who knows. But I do know that a big move to the upside wasn't a surprise, it was just a matter of when.
Price wise, we have USO back near highs. Could we have a double top if equities get closer to finally running out of steam for just a bit?
Past performance is not indicative of future results
And in forex, the USD keeps gaining strength. So today, it was USD up and equities up. Is that because the ECB and BOE still have the ability to do more in the way of easing strategies too?
Here is the AUD/USD - where the AUD had that large move down, a small retracement, followed by another move to the downside:
Past performance is not indicative of future results
Enjoy the employment report tomorrow.
Happy Trading and Be Environmentally Cool
Coach Brian
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