10 YEAR U.S. TREASURY YIELDS

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10 YEAR US YIELDS

Yields are rising once again putting pressure on the bond market. U.S. 10 year Treasury yield doubled since mid-2012 and now it is close to strong trend resistance between 2.9-3.0 levels. 200-day moving average which is at 2.4 levels is acting as medium/long-term support. Unless 10 year U.S. yield breaks down 2.4 levels in the following weeks we can expect higher prices that could eventually clear the 6 year-long trend line resistance at 3.0 levels. Technical outlook is positive and suggest higher yields in the following weeks/months.

US 5 YEAR NOTES

U.S. 5 year treasury note completed a pull back after breaking down strong trend support in the first half of 2013. Unless price moves above 122 levels we should expect lower bond prices in the following weeks. Technical outlook is negative.

TECH TRADE

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TECH TRADE

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U.S. JOBLESS CLAIMS

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US WEEKLY JOBLESS CLAIMS

After four years of strength in employment figures, weekly jobless claims found support at multi-year low around 300K. Weekly jobless claims reversed from 280K-300K area in 1989, 2000 and 2006. Similar reversal might be in place as we enter the last quarter of 2013. Jobless claims already experienced a sharp rebound over the past few weeks and as long as it stays above 280K-300K area we could see weak employment figures in the coming months. Today’s number came in at 358K and this is clearly above the strong support area. Earlier analysis on the jobless claims can be found here (August 9, 2013 , June 6, 2013)

DOW JONES INDUSTRIAL & US 5 YEAR T-NOTE

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Dow Jones Industrial Average pulls back to its long-term 200 day moving average. This is also the 5 year-long trend line support. At this point I see the market oversold. Strong support area is between 14,300 and 14,500. It is important to note that Dow Jones Industrial Average has been trading in a wide range between 14,500 and 15,500 over the past 4 months. It is now close to the lower side of that range.

U.S. 5 year T-Note completed a pullback to the broken trend support. Both trend line and the 200 day moving average are forming strong resistance between 122 and 123 levels. Unless we see prices breaching 123 levels, trend direction will be downwards.

TECH TRADE

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Japan, Norway, US, Turkey, Italy, France

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Here are some of the exciting charts that I shared on twitter @TechCharts. I’m attaching the twitter feeds for those who are following the blog but not twitter. More will be posted soon under the new category of Tech Trade. Tech Trade will include low volatility chart set-ups and widely followed chart patterns.

COPPER

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Copper prices might be forming a medium-term base above 3 levels. 3 level acted as strong support and it was tested for 3 times over the past two years. Inverted head and shoulder chart pattern has a trend resistance (neckline) at 3.4 levels. Breakout above this level will clear the neckline and the 200 day moving average. Such technical action will be positive for Copper prices and could be the beginning of a larger-scale uptrend.

COPPER weekly

COPPER daily

INDIA BOMBAY SE SENSEX INDEX

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INDIA BOMBAY SE SENSEX INDEX

It has been a difficult month for the emerging market currencies and especially for the Indian Rupee. Sharp depreciation of the currency and rising yields have caught the attention of the mainstream media. Tech Charts frequently updated the outlook on the rupee starting from 55 levels. While the Indian currency had a sharp depreciation, equities held well and moved in the opposite direction. India’s Sensex index is now closer to its historical high levels which is a strong multi-year resistance at 21,250 levels. This level was tested in the beginning of 2008 and 2011 and held as strong resistance. Breakout above 21,250 levels will be extremely bullish for the Indian equity market. Such breakout to historical high levels occurred in the South African All Share Index back in 2012 and resulted in a sharp multi-month rally. Due to its similarity in technical action I’m posting a chart on the South Africa All Share Index. In the following weeks we should watch 21,250 levels on the Sensex.

SOUTH AFRICA ALL SHARE INDEX

USD/JPY, EUR/JPY & CHF/JPY

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Earlier during the month I’ve analyzed the Japanese yen cross rates. USD/JPY, EUR/JPY and CHF/JPY all showed weakness for the japanese yen in the coming weeks. First USD/JPY breached its resistance and cleared its consolidation range. Now we are seeing further strength in USD against the JPY followed by a similar breakout on the EUR/JPY chart.

Below are some updated charts on the Yen cross rates. Currently CHF/JPY is challenging its strong horizontal resistance at 107.5 levels.

USDJPY II

EURJPY II

CHFJPY II