Intraday Market Thoughts

Archived IMT (2011.03.15)

by Ashraf Laidi
Mar 15, 2011 14:38

VIX gaps higher on Tuesday, soaring above the 200-day MA (21.70) as global markets tumble following the explosions at 3 Japanese nuclear reactors. Watch the 21.70 level on the VIX, which is the 200-day MA as seen in the chart Most particularly negative for the markets (and positive for the VIX) would be a sustained closed above the 200-day MA, which means a sustainable rally after the Gap-Up. The chart shows the last time a close above 200dma following gap up took place was in Aug-Sep and the more striking example of Apr-May, which coincided with the Flash Crash in US indices. EURUSD found support at $1.3850s, well above the 1.3820s mentioned in the prior IMT. My rationale is based on expectation that USDX negativity would continue against EUR for as long as the Fed makes no signal towards undoing QE2 and as long as ECB keeps door open for rate hike (however unplausible or damaging a rate hike may be). We could see EURUSD extend as high as 1.3990s but will remain well below the 1.43 trendline resistance.


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