Can the Olympics save cable?

The pound looks awfully weak to these eyes. Money is flowing out of Europe and into the UK but that’s probably pit stop rather than a final destination.

Technically, the chart looks like a typical failed bounce at the 50% retracement. The break of the mid-June lows today targets a retest of 1.5300/1.5250 and the failure at 50% points to lower lows beyond that.

I remember reading a report 4 years ago ahead of the Beijing Olympics that showed how investment tends to front-run Olympics and a bust generally follows.

China doesn’t have a floating currency but the Shanghai Composite stock market index from 2008 is worth a look.

From June until the Aug. 8 beginning of the Olympics, you have a stable market but it breaks down on the opening day of the games and continues lower afterwards. I wouldn’t be surprised to see a similar breakdown in cable (below 1.5234) during the London games. Opening day is July 27.