Archived IMT (2009.10.28)

S&P500 BREAKS BELOW the 55-day MA of 1,050 and the key trend line support of 1,047 (see yesterdays weekly chart setting confluence point of TLines from 666 low and Aug lows). Despite higher highs in US indices, there are lower highs in their oscillators, deepening their bearish divergence. More damage in the YEN crosses as risk aversion sets in. Despite smaller than expected build in crude oil inventories (800K vs exp 1.8 mln), crude oil breaks below the 78 support, making CLASSIC H&S pattern w/ the right shoulder at 80 and interim target at $76 before weeks end, with 70% probability of seeing $74 before weeks end. EURJPY targets 132.50 (down 270 pips from last nights IMT). No fundamental reason why GBPUSD is bucking the trend, but resistance still stands at 1.6470. Ashraf is on travel so updates will be less frequent than usual.