FTSE near the top in fifth wave

Glancing at Bloomberg this morning and here are the two top stories:

“European Stocks Rise on Economic Growth Optimism”

“German Growth Slowed Amid Euro-Area Fragility”

Hey Bloomberg – make your mind up!  But that sums up how the MSM treats a market move.  If stocks go up, they have an answer.  And if they go down, they have another ‘reason’.  They can explain everything – in hindsight.  I’m thinking of starting a hedge fund called Hindsight Capital – want to invest?

We have deep rallies in stocks – with the Dow (and Nikkei) lagging notably. UK and European indexes are stronger and here is the FTSE which is making a five five wave rally:

Also, the 6800 level is major long-term resistance (it matches the 2007 highs).  The FTSE turn is not far away.

AUS/USD

Following the rally last week, the market has dipped, but into a very interesting buy zone:

These are excellent tramlines but the upward break last week did not hold, and has dipped to make a nice tramline kiss. The market now is into chart support from the congestion zone from late December. If this holds, my first target is the 0.92 area.

The Aussie remains unloved, but not by the commercials!  COT data reveal the banks and the smart money hold a lopsided ratio of 5.5:1 long futures positions, while the hedgies (trend-followers) hold shorts by the same ratio.  The scene is set for a mammoth short squeeze.