Intraday Thoughts – November 14, 2008

After crisscrossing the waterline through most of the trading day US equity markets finally saw a late surge in the final hour of trading though this after flirting with multi-year lows in intraday action. Interestingly enough volume was up suggesting some leg to the move but before people get too excited some things have to be pointed out, the sharp intraday drop flirting with multiyear lows made for a classic short squeeze and it would take more days of such strength to convince that a bottom has been made. For the currency markets the late rally has meant risk taking appetite with across the board losses for the dollar and Yen. Most interestingly we now have Euro pairs within striking distance of the weeks highs after its rally was exacerbated by continuing realignment in the EURGBP cross to its favor. As we move forward we again turn to Asian equities for directions though it is worth noting that daily and 4-hour charts are now looking bullish in EURUSD, GBPUSD, AUDUSD,and their Yen crosses suggesting scope for bigger pullbacks among the higher timeframes should we see an Asian rally. Note though we could see a rough start for such a continuation of the move as charts in the lower time frames are overbought, time for us to redraw the Fibs from the weeks lows to the current highs.