The S&P 500 ES Traded one of it’s largest range days in quite a while today, opening and trading a 27 point range to close the day a bit better than flat.
Price traded down through the overnight to open at 2038.00, then tested the 2033 area of support before turning and flying back to the close the day in the 2060 area. This 55 point range will be the area to watch for an indication for the next direction. May have their sights set on the 2100 and 2140 area’s as upside targets. While others are waiting for what they believe is the impending fall of a market propped up by years of fake buying via QE 1-3 and Operation twist.
With no clear sign of anything other than just sticking to the trend. THe S&P has been grinding away at the tops with quick sell offs followed by buyers jumping in to bring prices right back. Take today’s price action with over 20 points of price failure for instance. Should this market continue to creep higher we could very well see the 2100 area. However if this plays out as a double top pattern we could be setting up for a reversal, perhaps another 100 points or so as a first target, then depending on the conditions of the market perhaps even more.
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Trader Problem… Gold
Solution: 2- If this trade break the trend line ( up trend)…get out my long position, and keep my short position so I start to make some profits.
Trader Problem… Gold
Solution: 3, …don’t get in my hedging area…and will keep moving up. I doubt on this one… but you need to be ready for any solution…
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Dollar Index Trades are pushing the markets from Currencies to Commodities, the strength of the dollar is unseating majors across the board, Who is ready for 96 on the Dollar Index?
Dollar index trade could carry to extreme highs we haven’t seen in years. At present rate we could see a test of 92. at years end. This is the previous article in August with this price action projection. Click here.
The dollar index is showing continuation pattern after continuation pattern. The consolidation zones are outlined in aqua boxes showing areas for indecision as the dollar moves up. This is a daily chart with first price projection to 88.40 with a second move to 89.78 and a continuation to 91.47.
The key to understanding the Dollar Index market is the weakening of the European Economy, the Quantitative Easing in Japan (which is just the Fed transferring the burden to Japan) and the punishment that is being handed out to Russia in the form of Cheap Oil. This could lead to the next super cycle in commodity price declines and weakened currencies. Joel Wissing
The dollar Index trade directly effect major currencies.
The key markets on daily charts I will look at are:
Japanese Yen -because of the new rounds of quantitative easing the Yen has been lifting the dollar index. We are looking for the Yen to move to .80 on the futures. Euro – more and more pressure on debt, taxation and for some countries to move away from the Euro keep downward pressure on the Euro. British Pound – Continued weakness and more financials showing underlying weakness in the economy could have the pound cycling further down. Canadian Dollar – the double whammy of debt and decreasing oil revenues as the dollar index strengthens has the CAD reaching new lows. If we get a break of the support here we could see another 4 penny move.
The Charts where we can see a longer term continuation of this move is the weekly chart comparing the Dollar Index trade and commodities.
Dollar Index price projection, next level of resistance if we get buyers in control to break resistance at 88.55 next move to 91.47. We could see a test to the supporting trendline, but the major price action in keeping with the trend could have us there before the years close.
Brent Oil and Texas Crude futures are showing this weakness also with a break of support and further price action as follows:
Brent crude support at 69.65 and CL Texas Sweet Oil at 69.
Last we are looking at Gold trading and there are some areas which we can look at either a reversal showing that the bear market has ended, or to continue with this price action as the dollar index strengthens, a move to 1078. If there is a major sell of watch for the test under $1,000 an ounce which will then give down side targets of $980, $910, and $780
Gold does have one side which could give it buoyancy and that is as a Crisis commodity. As a crisis commodity, any “doom” like scenario will cause gold to skyrocket. For instance Conflicts between Israel and any Middle Eastern Country – Especially Iran, we can also look for unwinding of some large futures positions and margin calls causing a temporary run on the markets.
Russia and Saudia Arabia are looking for ways to support the oil market, although combined they could slow the price plummet in the long run, neither economy could afford to support it. It seems these are punitive measures against Russia, which is unfortunately playing out against Canada also. With this in mind it will be a black swan event that probably sends this the other direction as the FED would probably stand aside to let the dollar index trade play out to new highs and not interfere with more direct QE or rate hikes.
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More and More New Highs these days for the S&P500. Seems everyone is talking about 2100 or 2150. In my experience when everyone is talking about it, it has a good chance of being set up for a sell off. But who knows? Then I saw something interesting in a FB post by a trader friend of mine that pointed out something I hadn’t noticed. Looking at it now, I can’t believe I hadn’t seen it, it seems obvious to me now. So I decided to look at my own charts on it.
This is a look at the daily chart of the S&P500. It seems that since July it has been creating a Megaphone pattern that after Octobers 150 point unilateral run, is now closing in on the resistant trend line in the 2035-2045 area. Based on this chart, this 2035-2045 area is a decision point. It could get a jump in volume from the buyers and close above 2045 here, in which case I would probably start leaning long. Or this area could be a prime candidate for a reversal. Of what magnitude one would have to wait and see. However there are a couple area’s of interest that I thought I would outline.
Pushing these highs is now seeing an increase in volume. Rather it is decreasing as prices move higher. Not a great sign for breaking through resistance in my experience. Also, looking back to the August swing low and using a FIB Retracement on this move up, a reversal and move back to test the 1900 area of support would be a great set up as an Inverse Head & Shoulders pattern and also fall perfectly into the 61.8% retracement area of the present move up.
Next stop, should price continue through the 1900 area then next we could see price move towards the previous swing low in around the 1813.00 area for another test. Then – the full Megaphone after that could see a test back as far as the 1750 – 1730.00 area. Now I am not making any trades on this yet, as I don’t think there is any goo indication of what direction this market will take yet. I don’t like low volume moves at the very top, they don’t fit my trade criteria. I prefer clarity in what I see and I don’t have it on this just yet. However it is something I am watching and considering in planning for the next trade on the ES for me.
Crude has been under a lot of pressure lately, spending a few months now constantly hitting new lows. It has blown through any support it has hit since it bounced at the $91.00 area. Since that it has been straight down $15.00 and has been testing the $76.00 area the last few days. I don’t think a retracement at some point here is out of the question, The weekly chart shows the $74 – $76 area as an area for reversals. However, the bottom buyers have been hammered on this move over the past couple months and being a bit gun shy on going against a move like this could probably save you some pain.
If price moves through the $75.00 area then it looks like the next stop will be $71 – $72.00. Seems it should be a great time to be invested in refineries as they love keeping prices the same (or a real small drop) and steepening the spread.
This week I haven’t seen too terribly much to get excited about. I take a look at a few markets that I have found that I am watching for larger moves in the Mid – Long Term time frames. Here is a quick look on some of the charts I am looking at this week and trading.
Looking at the weekly chart on the AUD/CHF we can see that this pair is looking like another move up is forming off of the supporting trend line. This pair also seems to be playing out an Inverse Head and Shoulders pattern on the weekly chart from August 2013, with also another Inverse Head and Shoulders Playing out on the daily time frame moving into this move up. This multiple time frame set up should be good for a low risk long entry with support at the 0.8350 area.
Both the Monthly and the Weekly charts on the EUR/USD are moving into long term support. Bringing back the Multi-Year pennant that I wrote about a couple months back, we can see that price is moving to touch to the supporting trend line from all the way back to 2008. This current area @ 1.2400 – 1.2450 is also an old low from 2008, so the possibility of finding support here does exist. However I believe the more likely scenario will involve a short term stall here with some small potential upside (Say roughly 1.2570), then the continuation of the move to test the 1.2200 – 1.2270 area.
Should price break below the 1.2200 area in the future, we could be looking at a massive sell off that could see prices move to test into the 1.1800 area or even further to prices not seen since the early 2000’s such as 1.1000 or 1.0500. However I don’t see those prices anytime in the near future, and as long as the long term support at 1.2200 is intact I will not be looking for those figures.
The EUR/Cad continues to flirt with support. Watching the important 1.4000 area on this pair as the Euro has been testing this area since August. If this support is breached we could be looking at price trading to test the 1.3700 – 1.3800 area of support. With the MA’s in a full bearish sweep, price has definitely got some downward pressure. However unless price trades and closes below the 1.4000 area, I would be leaning to finding a low risk entry for a move back to test upside resistance first, as this is the 5th time on a daily chart that price has tested this area in the last 4 months.
Looking at the EUR/GBP on a weekly chart we can see that we are trading a longer term bearish channel. However price has now tested the 0.7760 area for the second time and has not broken support. With this weekly double bottom pattern in early stages and what seems to be a new weekly higher low coming in right now. An entry for a test back up to resistance is starting to look probable. 0.7980 and 0.8100 could be good targets for resistance if that plays out. However, if price trades back down and breaches the 0.7750 area, we could be looking at another bearish move and then target 0.7550.
GBP/CAD took a big hit today diving over 240 pips from today’s high. Price right now is testing the the weekly supporting trend line at the 0.7820 area. A break of the trend line could see price move to test the previous swing low price of 0.7531 from early September. Daily charts have MA’s in a Triple Death Cross from this pairs previous move down. 0.7820 is key…
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Gold trading targets long term looking at the monthly and boiling it down.
A quote from Greenspan this past week: Greenspan told the Council of Foreign Relations that the Fed’s $4 trillion balance sheet is a “pile of tinder, but hasn’t been lit.” Once the central banks stop “sitting on” their reserves, said tinder will ignite, “inflation will eventually have to rise,” and in turn, “gold will move higher, measurably so.” FXstreet
Problem is with all Ponzi’s the bigger they are the longer it takes to fall. So don’t look for the Dollar to disappear this year…maybe.
Gold trading on a monthly chart looking for support in this bearish channel.
The targets on the bearish channel could break the $1000 psychological support. This is where the real sell off could occur. But let’s look at the monthly chart to see what it reveals.
Last month we have a sell shadow that shows that the sellers are still in control and continue in the direction of the general bear market. There is no relief in site as the increase in volume is not capitulatory and there is no real support until 1090.
We might chop around in this area 1135-1160 until sellers start to panic or buyers see opportunity. The only way I see this happening is through politics and geopolitical mishaps rather than basic market fundamentals.
“trend is your friend” could not be stressed more and the volatility in gold should keep the beginning trader out of the product.
We can see the major support has been broken at 1160 and are watching for a weekly close above it.
We have a volume increase on the last week of selling and watching for this weeks volume levels. It seems there is above average volume with some momentum to the downside.
The volume of gold trading on the weekly chart has not shown any significant commitment or exhaustion. Watching for a level that breaks 500K on a weekly for a change in direction
As you can see on the red diamond, there might be an exhaustion point and time for a reversal.
A projected move to 1128-35 for support with a close on the trend line is a likely target if sellers keep it up. Watch for volatility into news.
Gold trading on a daily chart.
Last week we had a large move on seller volume as the JPY started their quantitative easing and pushed money towards equities. This started the next move which broke gold under the 1198 support which it had tested and failed previously to break.
Gold is staying with in the bearish trend lines and we might see a Retracement back towards the 50 moving average as sellers exhaust. Expect to see resistance at 1160, 1178, and 1198.
Gold would have to close above the 1202 on multiple time frames to invalidate this next price projection to new lows. Supporting trend line is the key.
Will update late. Watch out for volatility, minimize your risk and don’t trade gold if you are not familiar with the market. Never listen to anyones advice and be responsible for your trading. If you don’t have a written strategy, don’t trade.
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Gold…and Silver love it. …we have a lite break now, but after seeing Gold, complete the “M” pattern, and instead to bounce on bottom, it go down with a gap so it create news lows.
…Let’s see when this will stop bleeding, for Gold target…if I remember, this was at 950.00 and 740$ I think….
PS: as gold go down, gold mine liquid they assets to big bankers …isn’t nice to be a banker, be able to manipulate gold price, so then, they can buy profitable gold/silver mine, at the price they want to ?
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Major Trend is UP Short term trend is retracement
Today’s Projected range 1998.75 to 2020 On low volume
Resistance 2018, 2043,
2013 for a double top
Support to 1998 1986.75 Expecting strong support as price approaches the 2002 level
1898 for the 200MA
Capitulation to 1800
We have a few open gaps at 1988.25 and 1902.75 and the big one at 1850.25 Who knows when it will fill.
The buyers have pushed up on decreasing volume into this last gap up at 1988.25 so as we see the stock market exhaust watch for sellers to make a move to fill this gap and then probably a continuation with the major trend.
There is a good chance we will see some deflation as Oil is falling to new lows.
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A look at a few pairs of not this week. Since the FOMC & Bank of Japan news last week, we have seen some large moves in most pairs involving the USD and JPY. Will the dollar continue its run? Will the Yen continue to slide?
Weekly trading on the GBP/USD has fallen down under the 200MA now and has started to more downside pressure with the rapid rise in the USD since last weeks FOMC meeting. Should down side pressure continue, GBP/USD could see price test to the previous daily low in at 1.5925 and with a break of support there could look to test deeper support in the 1.5750 area.
AUD/USD has just seen a break of a Bear Flag on a daily chart. Again with the large upside on the Dollar Index this pair is suffering as well and could see the test of the previous low at 0.8640. If the 0.8640 area doesn’t hold, this pair could see more downside to the tune of 400 – 500 pips. Monthly support shows a possible 0.8100 target should the selling continue.
Both of these pairs have seen substantial downside in the last few months. However looking at them against each other we can see an Inverse H&S pattern formed on the daily. Should this pattern play out we could see an opportunity to take the Euro long against the AUD. Especially if the AUD/USD breaks support and starts a long term decline towards the monthly support in the 0.8100 area as I mentioned above. However with the Euro under wide pressure as well, it may just be a matter of the biggest loser contest here.
USD/JPY has seen quite the move recently as well. With the USD strength and the announcement of BOJ with more buying of equities the JPY has seen a sell off across the board. As my 114.000 target that I wrote about a couple months back has now been hit, I am looking for a further move into the 116-118.000 area, with a long term extreme high target in the 123-124.000 area over coming months.
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Corona, CA – Price Projection – The S&P500 emini futures has hit the 50MA, (moving average) and could stall and create a consolidation zone from 1948 to 1972.
This Zone from 48 to 72 was the previous swing high of consolidation before the last buyer move and the correction to 1820.
The blue arrows are a single deviation price projection in both directions. 1972 to 1950 are the bounds for the first move dependent on the opening pressure from the overnight.
For a single directional move with momentum we are looking for resistance at 1992 and support to come in at 1930. These would be large swing moves and Monday normally falls into a range of 13 to 18 points.
Buyer Volume has been decreasing on the past 3 days of trading and this could sign that the bulls and bears are searching for direction and waiting for one of the other to make a move to create direction. A lot of the general financial media has talked about taking profits at this level and breaking to new highs. Watch for the bounce off the open if there is no major news breaking and NY is not experiencing more Ebola.
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