Thursday, June 03, 2010

Kermit's Color

A big change of momentum yesterday, but will it hold? Getting 2 days up in a row hard been a hard sell for the past month and with Thursday being the highest probability down day in the week, the odds are a bit iffy. After suffering breaks of longer term support levels XLE and EEM staged dramatic recoveries yesterday. The BP incident has really done some damage to the energy sector including BP, APC and HAL. Actually, XLE would look a lot worse except that XOM is the largest component of the ETF and has so far managed to stay out of the liability pool, thereby propping up XLE. Until the BP well is finally capped I expect to see continued volatility in the sector as the specter of federal, state and local liability claims loom.
On the currency front the pound has been enjoying a little rally in the face of NEM's 2% gain. Technically, FXB, FXC and NEM reflect almost identical patterns, the big difference being that the NEM 30 day linear regression channel (LR30) remains upslope while the former 2 are downslope, the implication being that NEM is the better choice for the present time.

1 comment:

The Average Jay said...

nice post. Jay

http://tradingwiththeaveragejay.blogspot.com/