Week 20 (17th May-23rd May): Weekly Moo River Watch on Wealth (Currencies)

Cable (Sterling/dollar)

(based on 30 year advanced data charts)

Yearly

We are trying very hard to pull away the lower bollinger band towards the bollinger midline near $1.67. A challenge there is inevitable before cable's fate can be decided, parity or back to $2. Cable could be wild as well, so there is no half-way solution this year. Before the end of 2009, we would have seen either $2 again or parity, which would be a shocker and satisfying to the likes George Soros.

Momentum indicators are not bullishly configured, so the bear market is the big theme here, business as usual.

Quarterly

There are a few things to note, if you are a bull on cable.

Price chart: we are possibly shaping up a reversal pattern here, with last quarter's doji candle and this quarter's rise so far.

Rsi: it has bounced off 32ish, though not based on a proper W,it is still a good bounce;

MACD: the bearish momentum from Q4 2008 was so severe that it has probably shot itself in the foot, now price might meander and recover based on waning bearish momentum (note: not on bullish momentum, but on waning bearish momentum), until there comes a point that market must decide whether it has actually said goodbye to the bear market in Q1 2009 and has now entered a bull market. When it does show plenty of evidence of that, it will be too late for some heavily leveraged bears. The truth hurts, particularly if it takes ages for one to realise it.

Elder Ray is also bending up.

Other momentum indicators are still bearish. So overall, a mixed bag of signals: is this a bear market rally on the way to parity, or a new bull market towards $2 again.

Monthly

If you are a bull on cable, your eyes start to light up here, as there is more evidence of bullishness.

Price: we have managed to disentangle ourselves from the lower bollinger band, though there is no W there.

RSI: when we reached parity last time in 1985, rsi reached 16.68 and this time, we hit even lower at 15.9. A rise through 30 will be very significant indeed. There is no W shape there though.

MACD: it is confirming waning bearish momentum for now.

All other momentum indicators are bending up, with a possible W on elder ray.

Overall, it tells a story of being way oversold at too fast a pace, rather than of any bullish momentums.

Weekly

While bulls must constrain their enthusiasm due to the fact that we have established any upstream moo rivers yet, but the bullish signals here are very strong and visible indeed.

Price chart: the bounce came off a good W, with a continuation W, which took the price straight to the upper bollinger band. This is a strong rally, which merits either a continuation here along the upper bollinger band or at least a flat bullbear battle zone, above bollinger midline near $1.45ish. Para sar dots are getting used to being green a significant change. To date, it is not yet possible to establish upstream moo river there, only a crossing in the ongoing downstream moo rivers (yes, there are a good number of them downstream moo rivers from way back).

RSI: We have bounced off the lowerbank in a ginormous downstream moo river and we are crossing over to the upperbank and there is still some distance from here to the upperbank yet. Without breaking this ongoing downstream moo river, we can not yet draw an upstream moo river. There it lies the danger, once we are ready to draw the upstream moo river, for the heavily leveraged bears, it might be too late.

MACD: it is indicating future price rises might be based on waning bullish momentum, suggesting we are headed for a topping exercise in the not too distant future.

All other momentum indicators are bullishly configured and supportive, with repulse being a straight V shaped rally.