Currency Froth

posted Jan 20, 2015, 10:43 AM by Katie Shook

Tuesday January 20, 2015

There’s been a lot of froth in this market as the SPX retreated to re-test the longer-term 1991 support level.  Already the 2000 level has been taken out.  And, despite last Friday’s rally going into the long weekend, there’s not been much in the way of momentum reversal.  With the Swiss un-pegging the Franc from the Euro the currency wars are officially out of the shadows.

There’s likely to a be a bunch of analysts insisting the world markets and economies will be collapsing any day now.  Irony says they’ll be wrong — at least for a season.  But it’s tough for me to disagree with the idea that global markets aren't at all healthy right now.  Why is everyone in such a hurry to weaken their currency?  And will stocks be short-term, intermediate-term, or long-term winners in this game?

I don’t know…

Here are the key levels I’m watching this week:  up-side resistance at the 50-day moving average (2046), intermediate support at 1991, and more serious support at 1974/1967 (around the 200-dma).  As the price of oil goes, so goes this market (for now)

ScreenHunter_02 Jan. 20 06.19

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