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Trading The Technical With BofA: S&P500, EURUSD, Treasurys And Crude

Tyler Durden's picture




 

Since fundamentals have been irrelvant for years, the only possible (short-term) guide in a market in which the only thing that does matter is the Fed's balance sheet, are trends (as Hugh Hendry put it so appropriately) here are some technical trade ideas from Bank of America, on the EURUSD, Treasurys, the S&P500 and WTI.

First, on FX:

Looking for the EURUSD Top:

 

As we recently wrote in our 2014 Year Ahead report, we are US $ bulls for the year ahead and look for €/$ to trade lower toward the Apr'12 lows, at 1.2746, and, potentially, the 200m avg. near 1.2173. In the nearer term, we continue to see the gains from the 1.3295 Nov 07 low as corrective and temporary. The impulsive decline from the 1.3833 high on Oct 25 says the trend has turned bearish for the 200d (now 1.3248) and, potentially, the 17m channel base at 1.3065. An impulsive decline below 1.3694 confirms the trend has resumed lower, while OUR BEARISH VIEW IS INCORRECT ON A BREAK OF 1.3833.

 

Next, on Treasurys :

Head and Shoulders base says stay bearish 5yrs.

 

Since the Friday NFP, we have seen a sizeable, bullish turn in US Treasuries. However, despite this turn, the bigger picture trend continues to say, "STAY BEARISH". Our point of focus remains very much on the 5yr, where the 2m Head and Shoulders Base remains intact. Indeed, it is quite common to see a "re-test" of a Head and Shoulders neckline following the formation's completion. That is likely what we are seeing here. With the neckline currently at 1.447%, further yield weakness, price strength should prove limited before the larger bear trend resumes. We have taken this counter-trend move as an opportunity to add to our TYH4 short (recall we recommended going short in last Thursday's Liquid Technical Alert) at 124-20+ for an average of 124-17+. Our stop is 125-08 and our downside target is 122-06+.

 

Next, on the S&P500 (via ESZ3):

Watch SP500

 

Turning to ESZ3, the break of 1799.75 alleviates the correction risk and points to bull trend resumption. A break of 1812.50 confirms, targeting 1847/1850. Below 1799 means renewed range trading, while bears gain control below 1773.25

 

And finally, on crude:

Get ready to buy a WTI pullback

 

The CLF4 impulsive advance from 91.77 says the near-term and, POTENTIALLY, medium-term trend has turned bullish for WTI. In the sessions ahead, we will look to buy a pullback into 95.74 for 102.95/103.00 and, POTENTIALLY, the multi-year range highs near 110.55 and beyond. WTI bulls, GET READY.

 

 

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Tue, 12/10/2013 - 12:22 | 4232672 Capitalist
Capitalist's picture

The only strategies you need in this market is to BTFD then BTFATH.

Tue, 12/10/2013 - 12:26 | 4232683 Ivanovich
Ivanovich's picture

Actually, the best strategy is not to be in the market.  I quote the WOPR - "The only way to win is not to play."

Tue, 12/10/2013 - 12:28 | 4232688 knukles
knukles's picture

Actually, the best strategy is just to be fucking rich.

http://nypost.com/2013/12/10/house-deal-by-steve-jobs-doctor-raises-eyeb...

Tue, 12/10/2013 - 12:34 | 4232715 Stackers
Stackers's picture

OUR BEARISH VIEW IS INCORRECT ON A BREAK OF 1.3833.

 

1.3767 right now...........

Tue, 12/10/2013 - 13:23 | 4232935 rubearish10
rubearish10's picture

...they mean higher through it, I think.

Tue, 12/10/2013 - 12:29 | 4232694 LawsofPhysics
LawsofPhysics's picture

Yes, all you need to know now; when fraud is the status quo, possession is the law.

Tue, 12/10/2013 - 12:27 | 4232684 LawsofPhysics
LawsofPhysics's picture

A WTI pullback with the dollar falling? WTF? Is the dollar going to suddenly get stronger when the puppets in D.C. realize that they cant service existing debt, much less fund a budget?

 

Up is down

war is peace

etc. etc.

Tue, 12/10/2013 - 12:37 | 4232729 dick cheneys ghost
dick cheneys ghost's picture

right u r

the best golfer is black

the best rapper is white

francis got banned

and people are buying invisible coins

fuck me...this is the fucking twilight zone....

~~~

Tue, 12/10/2013 - 19:42 | 4234183 Exponere Mendaces
Exponere Mendaces's picture

@dick cheneys ghost

Usually those who don't understand the world changing around them think that everything happening is strange and weird. It means you've lost the pulse of what is going on, and the ability to adapt. My condolences, the rest of your life won't be much better.

Tue, 12/10/2013 - 13:54 | 4233031 Keyser
Keyser's picture

Perhaps the whisper is that taper is ON.

 

Tue, 12/10/2013 - 12:27 | 4232685 The worst trader
The worst trader's picture

That will work till it doesn't............................. STFR is the new strategy

Tue, 12/10/2013 - 12:44 | 4232740 Pareto
Pareto's picture

STFR = Short the Fucking Reversal?

Tue, 12/10/2013 - 12:27 | 4232693 Iam Yue2
Iam Yue2's picture

I am getting concerned that Stolper is going to end 2013 with a correct call.
"goldman's Stolper Issues 1.40 Price Target On EURUSD."

It is good to see the € perform so strongly. Good, that is for deflation and cheap imports from EMs. Not so good for that dear old export led recovery.
And things can only get better when tapering is finally unleashed.

Tue, 12/10/2013 - 12:31 | 4232711 LawsofPhysics
LawsofPhysics's picture

"export led recovery"  -  I have always wondered about this, especially now that it is a global market, could someone please tell me precisely what the earth is "exporting" and what are these aliens providing in exchange for the labor, resources, and energy required to make those products?

It seems to me that humanity isn't just another ponzi, it's the ponzi.

Tue, 12/10/2013 - 12:40 | 4232731 Bryan
Bryan's picture

Soylent Green is the ponzi!

 

Tue, 12/10/2013 - 12:30 | 4232707 knukles
knukles's picture

Look at the charts....
I don't see 'em same way....

The T chart shows a head and shoulders forecasting lower rates...
Gold charts show an inverse head and shoulders forecasting higher gold prices...

Ties together as harbingers of er, indica, er whatever of a slower, more risky economic/financial environment.
Hah!

Where's the "E"?

Tue, 12/10/2013 - 12:35 | 4232721 orangegeek
orangegeek's picture

Euro weekly continues to consolidate and head higher in the process

 

http://bullandbearmash.com/chart/euro-weekly-straight-week-consolidating...

 

While the USD continues to get pushed down

 

Euro should move down soon

Tue, 12/10/2013 - 12:52 | 4232780 pragmatic hobo
pragmatic hobo's picture

... technicals don't apply in this market either ... all bearish signals are just a trap as algos then ramp the market to take out the shorts as market hits new high ... you wonder who's doing the BTFAH? it's the people who follow fundamental/technical signals to short this fat-pig of a market.

Tue, 12/10/2013 - 12:54 | 4232796 wisehiney
wisehiney's picture

Pretty big crowd of folks predicting higher rates.

Tue, 12/10/2013 - 13:00 | 4232830 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

May 2014 be an Interesting year ...

Tue, 12/10/2013 - 13:22 | 4232938 The worst trader
The worst trader's picture

Taper is now BULLISH for stocks! BTFD! Realy?

Tue, 12/10/2013 - 13:25 | 4232946 The worst trader
The worst trader's picture

STFR sell the fucking rips.

Do NOT follow this link or you will be banned from the site!