6.10.2012 Cable and Fiber Top Down

Seasonal tendency has a retracement taking place in early June and a continuation down to post a near yearly low by the end of June early July for the cable.  Last week we saw a bullish retracement.

Commercials increase net longs on cable and fiber indicating we haven't bottomed out yet.  I think, historically, this might be the highest number of net longs ever recorded for the fiber.

No big change on OI.

No failure swings on t-bonds.

No failure swings on the indexes.

Forex calendar looks relatively uneventful for the upcoming week.  Of course the big news on Saturday was a Euro bailout for Spain.  Will be interested to see what that does to opening price later today.

Cable


Looking at the cable chart it may be that we posted a swing high on Thursday.  We could expect a retracement up in the early part of the week and a continuation down for the remainder.  Note the Type II trend following divergence shown by the red lines on the chart.

Unfortunately the cable is in somewhat of a no-mans land.  A climb to the 5600 figure would be nice to look for shorts from but that is 130 pips away.  4hr chart shows some reaction to the 5514 level.  Pulling a fib from the May 28 high has a 62% retracement right around the 5550 level (not pictured).

Fiber


Fiber shows the same thing on the daily chart as far as Type II divergence.  A 62% retracement from the May 28 high is around the 2620 level, over 100 pips away.  The 2580 level and the 2620 level both are possible areas to short from.