Video Update: 24 January – see the divergence?

Welcome to the video update for Monday, January 24th.  Please note that the FOMC announcement is this coming Wednesday at 2:15pm est.  First chart up is the EUR/USD pair weekly where price moved higher in to the sell zone as discussed in last week’s video update.  Look for a selling opportunity or if price moves higher see what the next target is.  On the daily EUR/USD pair chart price exceeded recent highs so IF price retraces in to the buy zone it will be important to see if price finds support or not.

Since spring of 2009 Trader Rick has been tracking a dragon pattern on the weekly Canada chart.  It’s been awhile since this pattern has been updated so take a look.  We are approaching a major target area. This is a pattern worth getting familiar with if you aren’t aware of it.

Moving to the crude market, price made new highs last week but closed lower than the previous week.  Question now is, if price pulls back, will it find support in the buy zone?

A very interesting development in the stock indexes is the divergence on the daily chart between the DOW and the other indexes.  While the DOW (YM) made a higher high on Friday, the ES, NQ and ER did not.  Either the DOW is going to pull back to the other indexes or the others will catch up with the DOW.  Do not expect this divergence within the stock indexes to last long.

Trader Rick shows the underlying levels of support in the ES so be sure to check these out.

Good trading!

Tags: buy zone, divergence, dragon pattern