Citi: Stocks, Bonds, Gold, & JPY Levels To Watch

Tyler Durden's picture

The 10Y yield closed below its 200-day moving average and should test down to 2.47% in the short-term; and Citi's FX Technicals believes the Dow will test its 55-week moving average at 15,214, S&P 500 at 1,707; and Gold's consolidation/correction is over - the uptrend has resumed.


Via Citi FX Technicals,

US 10Y yield: Closed below the 200 day moving average and should test 2.47% in the short term

US 30Y yield: Met the initial target at 3.56%. We need to wait for further developments before confirming additional breaks on the weekly chart

Dow Industrials: Closed below the 200 day moving average for the first time since late 2012 and is likely to test the 55 week moving average in the near term at 15,214.

S&P 500: Likely to continue lower towards the 200 day moving average at 1,707.

USDJPY: Breached support levels in the 101.50 area and should test the 200 day moving average at 100.09. Support levels below there are just below 99.00.

Nikkei 225: The next support area is 13,799-918 which needs to be watched on a weekly close basis. The overlay with USDJPY suggests the pair should probably be trading around 99.00 now.

Gold: The morning star pattern on the daily chart and hold of the 55 day moving average tells us the consolidation / correction down is over and the uptrend has resumed.+

US 10 year yield – closed below the 200 day moving average

The close below the 200 day moving average opens the way for a move to the double top neckline at 2.47%

Decent support levels come in just below there at 2.39%-2.41% which would have to be watched on a weekly close basis before confirming any medium term break (and in conjunction with US 30 year yields)

For now a test of 2.47% is expected in the short term

US 30 year yield – initial target met

The initial target of 3.56% which was the double top neckline has been met. Additional supports come in just below at 3.48%-3.49%

While there is a danger of lower yields still (following the monthly reversal seen in January), we would need to see a weekly close below 3.48% and weekly closed below the support levels on US 10 year yields at 2.39% before confirming another break.

Dow Jones Industrial average daily and weekly charts

Left chart: Closed below the 200 day moving average for the first time since late 2012

Right chart: Focus now turns to the 55 week moving average at 15,214. That is likely to be tested in the near term. A weekly close below there, if also seen on the S&P 500 (where the 55 week moving average comes in at 1,672) would amount to a more important medium term bearish break.

S&P 500 – likely to test the 200 day moving average

In the shorter term, the S&P 500 is still at risk of posting further losses down to 1,707 (200 day moving average) and parallel of the trend across the highs.

USDJPY – likely to test the 200 day moving average

Support levels at 101.53-102.12 have given way on a daily close basis

This now opens the way for a move to the 200 day moving average at 100.09

The weekly chart below highlights additional levels and the overlay with the Nikkei 225 highlights the danger of further losses on USDJPY...

USDJPY Weekly Chart

The 55 week moving average and parallel of the trend across the highs converge at 98.33-85

Only a weekly close below there would warrant serious concern over a more medium term horizon.

Nikkei 225 and USDJPY overlay – should USDJPY be lower? - watch the 55 week moving average

The weakness in the Nikkei 225 (which closed below the 200 day moving average today) would suggest USDJPY should be trading around 99.00

The next set of decent supports on the Nikkei 225 are at 13,799-918 where the 55 week moving average and parallel of the trend across the highs converge

We would need to see a weekly close below those levels before confirming any further bearish breaks

Gold – uptrend has likely resumed after consolidation

The negative divergence seen last week has now been unwound after the brief pullback / consolidation

Gold has remained above the 55 day moving average support at $1,235 and has posted a morning star like pattern on the daily candles

This now suggests the uptrend is ready to resume and higher highs are likely

As a reminder, the weekly chart showed another bullish outside week two weeks ago...

A rally above last week’s high at $1,279 opens the way for a move to $1,361-77 and then the more medium term double bottom neckline at $1,433.

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LawsofPhysics's picture

It's still a "debt-is-money" system folks.  You will buy debt instuments, yes, you will...

hedge accordingly.

THX 1178's picture

10Y @ 2.47? The tide pulling WAY out before the tsunami hits?

Annoyingserf's picture

Forgive me.

But, WTH is a 'Morning Star' pattern? 

SheepDog-One's picture

Gotta love the hard work of Citi, still trying to convince everyone this is actually a 'market' based on Morning Star patterns and support levels and whatnot....and not just whether the FED free money firehose is on/off.

Fuh Querada's picture

So the 55 day moving average was found by extensive retrotesting to predict trend reversals about 43.22% of the time whereas with the 50 day it was only 42.58%, and then only in the 2nd year of a 2nd presidential term. Exponential, of course.

SheepDog-One's picture

It reminds me of all these polls which always find '55% of americans or for or against whatever'.....well so what? Just flip a coin, probably get better results.

Vegamma's picture

Citi wishes it were a coin flip. Their predictions so far are a lot closer to 0% than 50%.

Dr. Engali's picture

This doesn't even qualify as a bounce, more like a flop.

Dr. Engali's picture

Tell me what old Yeller as to say and I'll tell you where the 'market' is going. The rest is just jibberish.

Sufiy's picture

The Chinese Government’s Gold Policy, From The Horse’s Mouth

  Koos Jansen reports how China implements Gold accumulation plan with the military precision and appropriate attention to the detail. We should not be fooled by the reported official numbers as China uses different tools to accumulate gold reserves. Jim Rickards has addressed this issue in his interviews before and now we have another confirmation of the State-level Gold policy implemented in China. This policy stands in the very sharp contrast with the Ben Bernanke's confession that he does not have a clue what Gold really means. 
  China knows about the fraud in the Fractional Gold Reserve System in the West and that there is no Gold left, like case with Germany Gold repatriation clearly demonstrates, and takes no chances by taking all available physical delivery in the higher purity 1 kg Gold bars. Last year we have already witnessed the first results of this plan broad implementation with China becoming the top Gold consumer in the world.

TheGoldMyth's picture

Sufly try thinking this way...if the banksters get to keep all the stolen gold. It does not make sense for gold to be recognised as real money if most of its distribution is owned by criminals>>?? Isn't there a conflict of interest here??

If currencies are to be backed by gold, where is the price discovery in a market where the amount of gold thus far stolen in a corrupt banking system could be as infinite as the QE used to obtain it by the thousands of tons at a time.

If you allign yourself with the aquisition of gold, then are you working to spruke the value of the gold the banks have aquired/stolen??

TheGoldMyth's picture

"The Chinese Government’s Gold Policy, From The Horse’s Mouth"

If the Chinese government is instructed by its central banks to tell its people to buy gold (Take it out of circulation), that will keep the value of gold high by creating artificial scarcity.
Who cares how much gold there really is hidden away, as long as everyone does their part to help gold remain scarce. Are you just doing your part??

If the Chinese people are being instructed this way, it frees up the Chinese central banks to perform their other fiat currency duties.

Buying vast amounts of gold is hard work. Are central banks getting tired of creating scarcity??

Isn't this why they are asking the government for help by getting the Chinese people to do it. The job of keeping gold scarce and out of circulation.
That is the way i see it.
In an environment that is debt ridden, there might be gold on the streets. All this gold spruking helps those who own most of it, and is hardly of any help to those who own the trinkets in the public.
All the central banks are in some kind of collusion to maintain scarcity. If they do not, there would be margin calls. It is exactly like real estate in that the houses/gold are locked up when entire economies gloablly are failing.
If you cannot beat them, then joining them in this is not the answer in my opinion at the moment..

TheGoldMyth's picture

The task of keeping gold out of circulation for the pure reason of maintaining a mythical scarcity is hard work.
The chinese government is not making the orders, they are being given the order to make a policy that is suitable to the Chinese CB's !!

The idea that Chinese government has thunk this gold policy up all up by itself, is naive in my opinion as an amature economic climate psychiatrist.

Spungo's picture

"Gotta love the hard work of Citi, still trying to convince everyone this is actually a 'market' based on Morning Star patterns and support levels and whatnot....and not just whether the FED free money firehose is on/off."

Actually the market was driven by fundamentals for most of the past few years. Earnings were up, profit margins were up, cost of labor (real terms) was as low as ever. The disconnect between stocks and reality started less than a year ago. Insiders were running for the doors since spring/summer 2013. The current market is purely driven by charts and psychology. Even the people who are bullish openly admit this. They say the market will continue to rise due to "multiple expansion" which means the price goes up while the earnings do not. 

thefirstabomb's picture

People are waking up.  Unfortunately it will be wild ride once a majority of people wake up.  From that mess (hopefully) we will have learned and build a better more stable system 

Clowns on Acid's picture

It's funny seeing the banks, Citi in this case, still funding Technical trading / research desks. What the fuck are you charting..? Investing behavior or a feckin' stooge at the Fed playing whack a mole with printed feckin money ?

Charting.... hehe... its as quaint as using a pay phone.

greatbeard's picture

Gold has resumed it's uptrend?  Ok.  To me it looks like gold has resumed it's range trade between 1,200 and 1,250.

OC Sure's picture

A line through the lows of Oct 15 and November 12 is still throwback resistance. The end of the year lows is on much lighter volume than the July lows. Long term downtrend lines not broken. It is not a confirmed Morning Star on daily charts. ...Gold is still in the woods.

TheGoldMyth's picture

greatbeard:Maybe you are putting the QE driven year of the horse before the cart.

Lewshine's picture

They are keeping the Dow on a pretty tight leach this morning. Trying to turn consensus without blowing their bank (so to speak). The prop is in and starting - Can they hold her up today? Me think not!

SheepDog-One's picture

I think the rubicon has been crossed, everyones broke there are no more suckers to step up and place their bets.

TheGoldMyth's picture

SheepDog-One...So lets use the currency the elite 1% who have stolen all the gold use. At least if we use it and if things get really rotten, we can sell it back to them to sevice any new debt we might have. I'm doing my part !! :-)