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Charting Key Breakdown Levels In The EURUSD, The S&P, The VIX And The Spanish 10 Year

Tyler Durden's picture




 

Looks like John Noyce's prediction, who among the Goldmanites, has long been bearish on the EUR, is about to be proven right. Below we present his latest technical observations not only on the key FX pair, but on the VIX, The S&P, and, perhaps most importantly, the Spanish 10 Year. In brief: if today's weakness is not contained, there could be a very signficant downside risk breakdown in numerous market indicators.

EURUSD – The underlying signals of a significant top in place look clear, but a few levels to watch.

-    1.4166 – Uptrend from the January ’10 low
-    1.3968 – Interim low from 23rd May
-    1.3810 – 200-dma
-    1.3571 – Uptrend from the June ’10 low

 
Since sending the bigger picture piece on EURUSD last Sunday/Monday a number of clients have asked about potential MT-LT (multi-week/-month) targets. The first real weekly chart support comes in 1.3558-1.3528 where the 55-wma and uptrend from the June ’10 lows are converged. Ultimately however if this is as big a topping structure as it appears to be, a move back towards 1.20 is something to consider.

VIX - For the first time since the drop in equities began from the 2nd May high the VIX is attempting to make a meaningful push through the highs of the range. This likely has important implications for risk appetite correlated FX pairs which are still in a “stretched state” in trend terms. USDMYR is the clearest example, it having spent a similar extreme period below its 200-dma to EURSEK prior to its recent sharp upside correction (further details below).

S&P – First good support below here 1,257-1,241. This is where the 200-dma, interim low from March and the primary uptrend from the March ’09 lows are converged. Although there are further meaningful supports down to the 55-wma at 1,217, a break of this support region on the daily chart would be the first warning of a more meaningful downtrend beginning, as opposed to the drop from the May highs being a correction within the broader uptrend. Again important for FX from a broad risk appetite perspective.

Spanish 10-year yields – Is the market about to break from the triangle that never seems to end? Since the November ’10 high at 5.58% Spanish 10-year yields have been forming a tight triangle consolidation, making repeated attempts to break both higher and lower. While it’s been incredibly frustrating, technically the greatest risk has continued to look to be for an eventual upside break, i.e. toward higher Spanish 10-year yields and also very likely (taking into account the setup on the spread chart) wider Spain/Germany spreads. The pivot to watch at this point is 5.53%, a break above there would give a triangle extension target in the region of 6%. As previously highlighted there’s still a relatively strong inverse correlation between the Spain/Germany 10-year spread and EUR/Crosses such as EURCHF. Overall, a break higher in Spanish 10-year yields would therefore quite likely have significant negative implications for the EUR.

 

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Wed, 06/15/2011 - 14:32 | 1372017 Highrev
Highrev's picture

Let'em rip.

Wed, 06/15/2011 - 14:41 | 1372057 Clueless Economist
Clueless Economist's picture

When will they listen to John Maynard and I????

We need stimulus.  We need to print more money so we can fund all of those shovel ready jobs that need to be filled.  This will save or create many millions of jobs by my caculations.  Never underestimate the Keynes multipler...the mor $ printed the better things will be. 

Wed, 06/15/2011 - 14:39 | 1372062 redpill
redpill's picture

OT: Not to be forgotten, everyone's favorite black swan...

Flashes of Cherenkov radiation and recriticality at Fukushima going entirely unreported

http://hawaiinewsdaily.com/2011/06/apparent-explosion-and-fire-at-fukushima-4/

Wed, 06/15/2011 - 14:48 | 1372089 Franken_Stein
Franken_Stein's picture

 

Probably transitory.

In any case: bullish !

 

Wed, 06/15/2011 - 15:09 | 1372176 dwdollar
dwdollar's picture

Magical levitation all afternoon as the DOW reaches -200.

Wed, 06/15/2011 - 14:28 | 1372018 Franken_Stein
Franken_Stein's picture

 

I have a serious question:

 

Can the movement in the EUR/CHF and USD/CHF FX pair be regarded as the inverse of what the movement of the gold price in € or $ would be, if it was only driven by supply and demand and not distorted by COMEX short positions ?

 

Both qualitatively and quantitatively ?

 

I mean gold is a scarce resource and the Swiss Franc is too.

 

The SNB, after unsuccessfully trying to print like crazy and buying Euros by the boatload which now rot on their balance sheet, has now given up on that and can only watch the Franc rise with despair as their Euros become ever more worthless.

 

Or is this comparison too far fetched ?

 

Wed, 06/15/2011 - 14:51 | 1372085 Ghordius
Ghordius's picture

I have the same impression
Add oil to the picture, and the three seem to dance a tango...

Wed, 06/15/2011 - 15:21 | 1372235 francis_sawyer
francis_sawyer's picture

If you have to ask, you can't afford it...

Wed, 06/15/2011 - 20:49 | 1373173 Orly
Orly's picture

Sure it can and it has acted the way you describe.  The reason has to do with "risk-on" vs. "risk-off."

The Swiss franc is now considered the world's most reliable currency and the action it is taking reflect an inverse correlation between risk and less-risk.  It used to be the job of the US Dollar to be the safe-haven currency but that is no longer the case.

As the global perception of the US as "saviour to all economies" plants its feet firmer in cement, as illustrated by the pieces Tyler had at the week-end indicating that the US taxpayer has surreptitiously supported European banks to the tune of some $600 billion, the further the US dollar will decline.  It has lost its safe-haven status because no one is sure what the Fed will do to shore up Greece, Portugal, Spain...you get the picture.

No one will be willing to give credence to a currency that is just giving it away.  In the meantime, the Swiss franc fills the role of risk-off currency of choice, while gold fills the role of risk-on (speculation...) trades.  What happens to the USD from here is anyone's guess.

:D

Wed, 06/15/2011 - 14:30 | 1372026 Village Smithy
Village Smithy's picture

As for today,I believe the magical ES levitation is just about to start.

Wed, 06/15/2011 - 14:48 | 1372090 EscapeKey
EscapeKey's picture

The DJIA bounces as if by magic every time it nears the -200 mark.

Wed, 06/15/2011 - 15:00 | 1372152 hedgeless_horseman
hedgeless_horseman's picture

Gentlemen, the hard deck on today's mission is 1263.

Wed, 06/15/2011 - 15:16 | 1372211 Greeny
Greeny's picture

Yeah, cause I bought few stocks there :))

Keep selling.

Wed, 06/15/2011 - 14:33 | 1372033 Franken_Stein
Franken_Stein's picture

 

Regarding the Spanish 10 year, this is not a triangle, this is going to be just an island gap  that is going to be closed downwards pretty soon.

You know, transitory.

 

Wed, 06/15/2011 - 14:41 | 1372056 Dick Darlington
Dick Darlington's picture

Todays closing on spanish 10 yr was 5,548%

http://www.bloomberg.com/apps/quote?ticker=GSPG10YR:IND

Wed, 06/15/2011 - 14:43 | 1372065 rubearish10
rubearish10's picture

Don't you just get the feeling "someone" is going make a Canuck like "stick save" between now and the close and if not, most certainly before tomorrow's US open after some kinda roiling this evening. Come on now,,,,,,,we've been here before. On with the Greek party, geeze!

Wed, 06/15/2011 - 14:41 | 1372067 Eddyspain
Eddyspain's picture

Well, spanish 10 year bond now at 5.548% now...plus serious rioting in Barcelona (regional parlament besieged by protesters, mps have to go in and out by helicopter or poclice vans) plus rumous of an general election in the fall etc etc

Wed, 06/15/2011 - 14:49 | 1372082 MrPoopypants
MrPoopypants's picture

More on VIX here, from a long term perspective:

http://karrpool.blogspot.com/2011/05/diary-entry-2-no-brainer-trade-of-2...

Wed, 06/15/2011 - 14:52 | 1372091 Greeny
Greeny's picture

"S&P – First good support below here 1,257-1,241."

Draw trend line from April 2010 to April 2011

And lower trend line (parallel) from JUL 2010 to

2011 and that my lower target for S$P 1170 and Not

freaking 1000, Where is the Silver Chart?

Cause it can drop to about 23/oz by your charting

theory as well.. Be fair.. You don't have to promote

collapse and create panic. We have enough of it in reality

already.

Wed, 06/15/2011 - 15:43 | 1372322 Arius
Arius's picture

right on...shoot the messenger...

Wed, 06/15/2011 - 14:52 | 1372092 sasebo
sasebo's picture

I've got a question.

WHAT THE HELL WOULD WE BE DOING IF TD & ZH WEREN"T STAYING ON TOP OF ALL OF THIS?

 

Wed, 06/15/2011 - 14:53 | 1372111 Greeny
Greeny's picture

on top of what, dude? Yes, Market is down today

and you are happy, check back 2010 summer..

plenty room to move down.. Today your conspiracy

theory works, let's check back tomorrow.

Enjoy bearning Americans 401k's..

Wed, 06/15/2011 - 15:23 | 1372270 sasebo
sasebo's picture

The world is full of stupid assholes. What else is new?

Wed, 06/15/2011 - 15:46 | 1372341 Greeny
Greeny's picture

that's exactly my point.

Wed, 06/15/2011 - 15:27 | 1372288 luster
luster's picture

bearning?

Wed, 06/15/2011 - 21:04 | 1373201 knowless
knowless's picture

maybe a combination of bear and burning?

Wed, 06/15/2011 - 20:37 | 1373159 Chump
Chump's picture

I get no pleasure from the pain of others, but we are so unbelievably fucked that a 401K account is inconsequential compared to the doom about to be visited upon us.

But maybe you're right.  Maybe all that matters is whether or not we're green tomorrow.

Wed, 06/15/2011 - 15:03 | 1372144 monopoly
monopoly's picture

That is something I do not want to even think about. Been here almost 2 years and this site sure helps me sleep well at night.

And, we got Robot as a bonus. :)

Wed, 06/15/2011 - 14:53 | 1372093 richard in norway
richard in norway's picture

could someone please explain the vix for me

 

what is it and how is it measured

Wed, 06/15/2011 - 15:00 | 1372132 Greeny
Greeny's picture

Basically Volatility rising as Markets go down..

Check VIX there is options you can play on it..

But the problem is: with rising VIX option premiums

goes up accordingly so when Market rebound you can

lose that premium.. No free lunch here. I was trying to

protect some investments today via options and it's simply

impossible, prices for the options too high..

Wed, 06/15/2011 - 15:42 | 1372331 Arius
Arius's picture

you can simply sell...

Wed, 06/15/2011 - 15:04 | 1372146 Dick Darlington
Wed, 06/15/2011 - 15:10 | 1372172 Instant Wealth
Instant Wealth's picture

.

Wed, 06/15/2011 - 15:14 | 1372202 DB Cooper
DB Cooper's picture

Not sure what you're asking - but if it is about VXX don't play with it or any levered ETF.  They are mathematical scams built by the big investment firms to steal investors money.  They are built to approach 0 and pretty fast too.  VXX has gone from a split adjusted 480 to 24 in a little over 2 years.  It is a one day trade only.

Wed, 06/15/2011 - 15:37 | 1372307 SilverIsKing
SilverIsKing's picture

Short those ETFs.

Wed, 06/15/2011 - 15:53 | 1372379 richard in norway
richard in norway's picture

thanks guys for the info

Wed, 06/15/2011 - 14:55 | 1372103 Caviar Emptor
Caviar Emptor's picture

It's time for the CNBS anchorettes to ask every day : "But is this the bottom?" 

Of course the more appropriate question would be "Is this a great bottom or what?" 

Wed, 06/15/2011 - 14:56 | 1372107 Tracerfan
Tracerfan's picture

Sorry, but this is all news-driven price movements, not chart-driven.

 

 

Wed, 06/15/2011 - 14:53 | 1372115 Caviar Emptor
Caviar Emptor's picture

Once again financials and materials leading the way down...the Pandora selloff is getting serious

Wed, 06/15/2011 - 15:07 | 1372150 Greeny
Greeny's picture

--deleted reason: duplicate---

Wed, 06/15/2011 - 14:56 | 1372122 sasebo
sasebo's picture

May I add -

TD & ZH are working their asses off for us.

Wed, 06/15/2011 - 15:01 | 1372133 slewie the pi-rat
slewie the pi-rat's picture

i'll take Charts for $400, please, alex.

and the answer is:  Bearish.  slewie?

uhhnhh...is it bullish or bearish if the S&P 500 chart reminds you of the Mountain Climber Game on The Price Is Right?

Wed, 06/15/2011 - 14:58 | 1372136 alien-IQ
alien-IQ's picture

it's 3PM. Critical levels everywhere. Smoke em if you got em kids...this could get weird:-)

Wed, 06/15/2011 - 14:59 | 1372141 hungarianboy
hungarianboy's picture

Look at that huuuge tick volume in EUR/USD 15 minute. Might bounce very soon.

Wed, 06/15/2011 - 15:01 | 1372157 monopoly
monopoly's picture

Not once have the idiots on the idiot channel mentioned that gold is "green".

Wed, 06/15/2011 - 15:09 | 1372191 alien-IQ
alien-IQ's picture

they were not just frivolously granted the moniker of "the idiot channel"...they earned it.

Wed, 06/15/2011 - 15:06 | 1372183 Laudrup
Laudrup's picture

Bet the Bernank is staring at these charts all day, sweating his ass off

Wed, 06/15/2011 - 15:14 | 1372196 chancee
chancee's picture

Such total bullshit price action on SPY... being completely propped up every time it tries to break through support.  The lie of SPY.

Wed, 06/15/2011 - 15:21 | 1372237 Greeny
Greeny's picture

What is your problem? Are you short?

Wait for QE3 then, Ben will take care of you :)))

Wed, 06/15/2011 - 21:57 | 1373295 Chump
Chump's picture

Stay long.  QE3 is coming, I promise.

Wed, 06/15/2011 - 15:24 | 1372254 qussl3
qussl3's picture

OPex

Wed, 06/15/2011 - 15:23 | 1372255 alien-IQ
alien-IQ's picture

it's not SPY it's the SPX 1260 that needs to break...the rest will follow.

And even more important.../ES 1250 break will really send things into a frenzy.

Wed, 06/15/2011 - 15:26 | 1372272 Greeny
Greeny's picture

Check July last Year. On SPX 200MA broken and ? It doesn't mean it goes to zero then.. Buy.. :) Worse case 1175 and by the way SPX and SPY the same sh*t

just SPY is SPX/10, get a clue..

Wed, 06/15/2011 - 15:30 | 1372296 alien-IQ
alien-IQ's picture

I know SPX and SPY are the same thing you fucking tool. But SPY reflects SPX NOT the other way around.

Guys like you I like to fuck your wives.

Wed, 06/15/2011 - 15:57 | 1372358 Greeny
Greeny's picture

Watch you mouth son, I don't have a wife, but you can became one, for my dog, if you gonna talk too much.

Wed, 06/15/2011 - 15:30 | 1372281 Bam_Man
Bam_Man's picture

They (your Plunge Protection Team) have successfully defended SPX 1263 THREE times so far today. That just so happens to be the 200 day exponential moving average. Anyone who doesn't think this market is completely fake needs to have their head examined.

Wed, 06/15/2011 - 15:39 | 1372314 Greeny
Greeny's picture

"They (your Plunge Protection Team) have successfully defended SPX 1263 THREE times so far today." Perhaps you should check your head, because not only you can read the charts. And people do play Support and Resistance.. Enough conspiracy theories.. You wanna make all the money shorting? Not going to be too easy for you.. Bernank should fry your butts at the end of the September.. All conditions are lining up for massive QE3.. all speculation of course, we'll see.. I'll keep buying PM's FU, doomsters..

Wed, 06/15/2011 - 16:13 | 1372453 Highrev
Highrev's picture

Held it on a closing basis, but closed below previous ST support. Just above the 200dma too, as well as the lower Bollinger on the daily, but that’s after a multi-session countertrend rally that’s basically gone sideways. The bulls would love this to be a ST “base”, and the bears want to see it turn into a bear flag. The NDX says the bears might get their way, but BKX says maybe not. I think we get an answer sometime tomorrow.

Wed, 06/15/2011 - 15:47 | 1372335 Absinthe Minded
Absinthe Minded's picture

Look at gold on the Comex, tell me that doesn't have manipulation written all over it.

Wed, 06/15/2011 - 16:02 | 1372406 richard in norway
richard in norway's picture

why

 

should it be going up or down, cos right now it seems to be the most stable trade there is

Thu, 06/16/2011 - 02:26 | 1373671 FlyPaper
FlyPaper's picture

Gold manipulation: a number of large US and foreign banks intervene in the gold and silver markets several times a week and sell 'short' gold or silver they don't have.  This depresses the price.  The pattern is quite distinct on the daily charts, typically (but not always) during US market times.    This is a long topic - for more information go to GATA (Gold Anti Trust Action Committee) www.gata.org.  

Thu, 06/16/2011 - 02:27 | 1373673 FlyPaper
FlyPaper's picture

Gold manipulation: a number of large US and foreign banks intervene in the gold and silver markets several times a week and sell 'short' gold or silver they don't have.  This depresses the price.  The pattern is quite distinct on the daily charts, typically (but not always) during US market times.    This is a long topic - for more information go to GATA (Gold Anti Trust Action Committee) www.gata.org.  

Thu, 06/16/2011 - 02:24 | 1373676 FlyPaper
FlyPaper's picture

Gold manipulation: a number of large US and foreign banks intervene in the gold and silver markets several times a week and sell 'short' gold or silver they don't have.  This depresses the price.  The pattern is quite distinct on the daily charts, typically (but not always) during US market times.    This is a long topic - for more information go to GATA (Gold Anti Trust Action Committee) www.gata.org.  

Wed, 06/15/2011 - 15:27 | 1372286 Fortunes Favor
Fortunes Favor's picture

Don't forget the AUD/JPY chart. Key support at the 84 level holding as is the 100 level on t he CDX IG 16 index....http://rosenthalcapital.com/blog/2011/06/credit-carrytrade-preciousmetals/

Wed, 06/15/2011 - 15:31 | 1372295 Absinthe Minded
Absinthe Minded's picture

@F'Stein #1372018

Long Nutella

Wed, 06/15/2011 - 15:37 | 1372321 chancee
chancee's picture

No, it's SPY... every algo keys off of it.  SPX means nothing to the algos.  Notice the giant amount of volume it's taking in this last half hour to hold SPY right where it is.

Wed, 06/15/2011 - 15:46 | 1372343 Temporalist
Temporalist's picture

So Moody's now threatening to downgrade French banks.  Mon dieu!

 

Banks caught in storm

"The ratings agency has now set its sights on banks with exposure to Greek debt – particularly French banks BNP Paribas, Société Générale and Crédit Agricole -- putting all three on review for possible downgrade."

http://www.theglobeandmail.com/globe-investor/markets/markets-blog/banks...

 

Wed, 06/15/2011 - 15:53 | 1372356 redpill
redpill's picture

PPT trying to stick-save the close

Wed, 06/15/2011 - 16:02 | 1372404 hugovanderbubble
hugovanderbubble's picture

Thanks ZH, to pay attention to the 10yrs spanish bond, gonna be so important for entering in a high volatility regime,

 

Regards,

 

Hugo

 

Wed, 06/15/2011 - 16:05 | 1372407 hugovanderbubble
hugovanderbubble's picture

Thanks ZH, for paying attention to the 10yrs spanish bond evolution, gonna be so important for entering in a high volatility regime,

 

Regards,

 

Hugo

 

Wed, 06/15/2011 - 15:58 | 1372409 buzzsaw99
buzzsaw99's picture

Equity margins will be lowered due to higher volatility. Ironically margins were raised in other areas for the same reason. Another day at the crooked casino.

Wed, 06/15/2011 - 16:04 | 1372416 Highrev
Highrev's picture

Very bearish price action today.

 

Is this being "coordinated"?

Wed, 06/15/2011 - 16:09 | 1372426 Donlast
Donlast's picture

Pack bags. The games over. The back of the rise since July 2010 has been broken come what may. Too many countries shifting gears and too few shots in the locker. All those central bankers who speculated so hard and based policy on a wing and a prayer are now redundant. The only question now is how low the market will go and how long it will take to get there.

Wed, 06/15/2011 - 16:14 | 1372461 Dick Darlington
Dick Darlington's picture

Italian 10 yr has also hard time to decide whether to make it or break it.

http://www.bloomberg.com/apps/quote?ticker=GBTPGR10:IND

Wed, 06/15/2011 - 16:25 | 1372480 Highrev
Highrev's picture

Bang up day for the USD.

Big daily stick in a possible middle wave position (as in a 3 of 3).

Wed, 06/15/2011 - 19:52 | 1373075 zippy_uk
zippy_uk's picture

"This is PIIGS to base... black swans approaching fast at 11 O'Clock"

Wed, 06/15/2011 - 21:44 | 1373270 scratch_and_sniff
scratch_and_sniff's picture

It never crossed anyones mind that this is not the end of the can kicking? c'mon.

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