Inside the Currency Market: S & P’s

From the 1915.75 close and to move higher, the S&P must break above the 1 and 2 year averages at 2048.49 and 1968.42. Crucial to the break of averages at the 1 and 2 year points are Medians found at 2067.13 and 1967.31. Add the significant top at the 2048.40, 1 year average then S& P’s moving higher is not an easy task. Failure to break higher leaves the S&P’s trading between 2 and 5 year averages at 1968.43 – 1626.38. A break of the 5 year average at 1626.38 then targets the 10 and 15 year averages at 1423.11 and 1315.85.

The S& P’s are trading inside a massive 732 point range between 2048.49 – 1315.85. Between 2048.49 and 1315.85 are found further averages at 1968.43, 1626.38 and 1423.11. Points 2048 and 1315 call the shots for S&P prices. Price rises leaves 1315 overbought yet price drops reveals 2048 oversold. Price extremes for both averages are found at 1868.02 below and 2275.16 above. Current price at 1915 is severely oversold from 2048 and becomes more oversold with any further price drops.

Significant tops are seen at the 1 year at 2048, 10 year average at 1423 and 15 year at 1315. Targets for all averages highlight not only significant peaks but the hard road to cross 1968 and 2048. Targets from the 1 to 15 year averages are found at 1988.33, 1865.40, 1936.71, 1755.43 and 1635.62. What targets and peaks reveal is the trading range between 1626.38 and 1968.43 is not expected to break anytime soon particularly as the 5 year average at 1626 reveals a trend just beginning. Important to the 5 year average is it mo longer contains the 10 months of post 2008 crisis lows between 757 – 935. Post crisis low data is now found in the 10 year average and its why that average fails to hold much significance.

The strategy moving forward is not longs due to significant points at 1968 and 2948 but further due to significant Peaks. I would feel more comfortable in selling any rallies until the averages normalize.

Brian Twomey, Inside the Currency Market, btwomey.com

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