A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain. ~ Mark Twain

Dow Jones

Chart 1 Four Hour Dow Jones Chart

A very simple situation is present within the U.S. markets. Taking out the previous highs for the Dow will likely give us some follow through. The upper red range line needs to be watched as so far optimism may be high but once again we can simply label the past two months of action as purely range bound!!

11275 - 11250 needs to give way for more momentum to build to the downside but before this can occur the reaction to the upper range line resistance needs to be seen.

Risk/Rewards ratios are not great at this moment in time and buying at 9800 Dow is not the same as buying at 11400. We are not seeing much accumulation here and markets that skate on thin ice can fall through sharply.

Euro

Chart 2 Euro Four Hour

Just as we mentioned yesterday, a retest of 134 has occurred and the market has since backed away. Holding above 13300 - 13333 leaves possible retests of 134 open over the short term. 13250 is the number that needs to give way on the downside for markets to test last week's lows.

At this moment in time it is hard to say which way the currency will be pumped but the declining red channel from the highs needs to be respected and that is where we're at currently.

We ultimately need to remain under the upper blue resistance line so that downward action can materialise. By NO MEANS can one get ahead of themselves and state a turn in direction is born. We are 250-300 points of the lows from a 1200+ point decline. This could develop either way but the credentials of this bounce seem more like a trap then a rally. We are not marrying this statement just simply giving our unbiased take on it.

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