Gold popped its head out of the tortoise shell with some vengeance yesterday. The early characteristics of this breakout are the 13-day moving average: the green line on the daily chart - currently @671.74. I won't enter until we visit that line again. The upside looks like 740; that's where it reversed in May 2006. That's a good run, worth the risk and worth the wait.



The US$'s weak across the board here today. The spikes are too high for immediate entry, so much so that they all look like great weekend shorts. NZDUSD looks like a great double top. If only I didn't believe it will break through.

I was wrong about the USDCAD reversal, that is, it didn't reverse. That trend is done. When a trend fails a support line something new is going on. The possibilities on USDCAD are: range-bound with a floor 1.1585, continuing downtrend with the longer 50-day ema in as the entry and a floor at 1.1450. That's only 135 pips in the best-case scenario. There's more on the upside reversal: 264. On a risk basis there' no point in fishing for a long. It's best to put this on the watchlist for a strong US$ reversal and get in for the 264 pip ride.

I'm long on EURJPY with a stop at 159.06, the 50-period EMA which has already proven itself on the hourly chart. I was waiting for a breakout above 158.3 on the daily. We're there.



I've bought into these step-like hourly patterns before with great success. Check each day, up the stop to the controlling ema and just wait for a breach. I've found they last usually for 8-days. I suppose you could find the other side of this channel with Bollenger Bands, buy why bother. This is a clear and persistent uptrend.

The equity markets have been on a roll for so long now that they've had a chance to form a base such that shorting doesn't make much sense, with the exception of MDY… if you could get in. Tradestation's out of shares to borrow.




The interesting one for the watchlist here are the semiconductors: SMH.



35.60 is a strong line going back to mid-2005. Strong lines are lines that have multiple points of support and resistance.

The current range floor is 33. which is not a great short and options just expired so there's no immediate play here. However, the potential for a breakout is huge. It reminds me a lot of BBH back in April of 2005. BBH broke 145 there and ran to 200, excellent options plays all along the way as no one believed it. Same could happen here.