Currencies & Bonds

The huge outside day referred to in the last report triggered a sell. It was negated today. That is not a good sign because when a market does so that quickly, it usually follows through in the new direction. On Wednesday, when it triggered a buy, it also formed a key reversal top to the rally that has been in progress since the Oct. 4 low. Yesterday's high (89.69) is the same resistance area that caused a major sell-off in mid September. Closed 86.07, down 22.

DEC MINI JAPANESE YEN: A very narrow range and inside day yesterday triggered a sell today. It sold off to 129.80 and then rallied. It has been for days trying to get over the 20 day ma but still cannot seem to do so. Just watching as it is still stuck in that huge range. Closed 130.23, down 11.

DEC SWISS FRANC: It formed an outside day today and continues to close over the 20 day ma. It has held that support since it got over it on Oct. 12. Just looking at the daily chart, the swiss could be forming a head and shoulders bottom. It would need to close over 112.72 to confirm a breakout from the right neckline. Bear in mind the head and shoulders formation is notorious for not being very reliable. Closed 111.91, up 1.06

DEC DOLLAR INDEX : Not much going on here. It refuses to rally and it refuses to sell off. The key reversal bottom is still intact as it continues to consolidate. Keep stops at 76.680. Closed 77.236, down .200.

Position: Long 77.640 (10.18).
Projection: 79.000.

DEC MINI EUROCURRENCY : Its key reversal top is still intact as it consolidates. Nothing new here. Keep stops at 139.080. Closed 137.63, up .24.

Position: Short 136.810 (10.18).
Projection: 134.000

DEC CANADIAN DOLLAR: It sell triggered last Tuesday from Monday's outside day has not followed through. It continues to consolidate in the same range between 97.50 and 98.50. Just watching. Closed 98.48, up .52.

DEC AUSSIE: It continues to struggle at the 100 and 150 day ma. Every time it reaches them (they intersect in the same area) it forms a key reversal top. It did so again yesterday. In spite of that, it is attempting to rally again today. Just watching. Closed 101.84, up .37.

DEC 10 YEAR NOTES: Tuesday's buy signal is still intact but the market has not done anything. Like so many others, it continues to consolidate. Just watching. Closed 128.225, down .045.