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Big Price Moves and Short-Term Trend Reversals

The ECB and Fed’s announcement to raise interest rates contributed to big price moves and short-term trend reversals in all main markets we follow.

 

By Corey Rosenbloom

The one-two punch of Mario Draghi’s ECB announcement with the Fed’s “we’re going to raise rates in December we promise!” statement contributed in part to big price moves and short-term trend reversals in all main markets we follow.

Let’s take a quick snapshot of today’s Money Flow grid across six (futures) markets:

Fundamental news and Central Bank policies aside, let’s focus on the knee-jerk reactions in today’s market.

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First, stock prices collapsed, continuing their sell-signal down away from 2,100 (@ES top left chart).

See Tuesday’s “Key December Bull/Bear Pivot Level for the S&P 500“  update for more info.

The Dollar Index (@DX – middle right chart) collapsed today, falling from divergences against resistance.

The sudden intraday collapse in the US Dollar (NYSEARCA:UUP) instantly boosted most commodities including Gold(NYSEARCA:GLD) and Oil(NYSEARCA:USO).

Chart Gold (@GC) in the upper right and Oil (@CL) in the middle left chart.

The movements here aren’t as dramatic as other markets, as these moves are currently counter-trend retracements.

Finally we see the Euro (@EC bottom right) surging at the same time the Dollar collapsed.

See this morning’s update “The Big Reversal Today for the Euro EURUSD” for additional perspective.

Perhaps the most surprising development today is the instant collapse in Treasury prices as seen via the 10-Year Treasury Note (@TY – lower left).

In sum, we have the Euro surging while commodities rally; US Stocks, the US Dollar, and the US 10-Year Treasury Note collapsed intraday.

Continue following these big developments through the remainder of the week.