Markets In Play

There's some really good price moves happening in a few markets.  We have a confirmed head and shoulders top pattern in the Euro.  For more analysis on this, please check my article on Inside Futures.  

The Australian Dollar is seeing very bearish action coming off its 9/8 high.  Since then, we have a dominant measured move (DMM) with a shallow retracement (under 50%).  This supports bearish action.  We have a possible supporting measured move (SMM) forming as well.  If we get a move below 0.7621, then it will also have a shallow retracement.  These two combined measured moves would support a move down to a minimum of 0.7501 to 0.7451 before taking out the 0.7726 high (assuming we get below 0.7621 first).

The Dollar Index is seeing similar price action to the Australian Dollar, only to the upside.  Coming off the 9/8 low, we have a dominant measured move (DMM) with a shallow retracement (under 50%).  This supports bullish action.  We also have a possible supporting measured move (SMM) forming.  Together, it signals a move up to a minimum of 95.895 to 96.50.

Finally, Gold is seeing bearish trading since its 9/8 high.  If we get a move below 1262.80, then a dominant measured move (DMM) would have formed.  This supports further bearish action.  Initial downside target would be 1245.90 to 1229.30.  I would expect a possible bounce from these levels, but the short side play would stay intact.  Eventually, my analysis sees a possible move lower to 1208.80 or below.

Orange Juice

There are 2 possible bottoming patterns developing on the OJ continuous contract.  First, a double bottom pattern will be confirmed with a close above 143.05.  The target would be ~ 158.10.  Second, a head and shoulders bottom pattern gets confirmation with a close above the downward sloping trend line.  It's target would be ~ 157.10 or less, depending on it's breakout level.  Supporting these bottoming patterns are bullish divergence on the RSI and a COT 52 week extreme short position.  Overhead challenges include the MR1 @ 141.17, the 50 DMA @ 142.76, the MR2 @ 149.78, and the 100 DMA @ 152.90.

Euro (update)

Here's an updated analysis on a possible reversal pattern forming in the Sep Euro...

The Euro has been trading higher since its Jan 3rd low of 1.0500 on the Sep contract.  This recent uptrend has a dominant MM with deep retracement and 19:17 right-handed skewing.  The 1st level supporting MM has deep retracement with 10:10 neutral-handed skewing.  Together they create my Fade Zone (1.14665 to 1.22354).  Because both retracements are larger than 50%,  I consider this a weak uptrend that should produce a nice downside move if a high is established within it.  In addition, there's a 2nd level supporting MM with a shallow retracement and 3:3 neutral-handed skewing.  This last piece provides a Fib extension of its own from 1.1393 to 1.1762.  It's this last MM that could help narrow down my overall Fade Zone.  Overlapping the two gives me the 1st area (1.14665 to 1.17620) that I will focus on for a possible bearish trade.  Finally, on the weekly chart, there's a bearish MM Pullback pattern developing.  The resistance zone is between 1.14812 and 1.15631 (red box in chart).  That could end up being the sweet spot.

Possible Reversal Patterns in Swiss Franc, Euro, and Dollar Index

There are a few potential reversal set-ups taking shape in the Swiss Franc, Euro, and Dollar Index.  I will give my initial analysis on the June contract, but ultimately would probably play out on the September contract.  First, the Swiss Franc shows a possible topping zone between 1.0540 and 1.0818 with a potential sweet spot in the 1.0727 to 1.0818 area.  The dominant and supporting1 measured moves both have deep retracements, which signals a weak uptrend.  If a reversal happens in my resistance zone, then I would expect at least a 50 pct retracement.  The most recent leg up, off the 5/11 low, will have a supershallow breakout with a move above 1.0335.  That is very bullish and could be the trigger to drive prices up into my resistance zone.  However, any bearish trades will need more supporting data.  On the flip side, you could also play into the possible upside breakout.  Entry would be above 1.0335 with stops below 1.0208.  Upside target would be at the low of my resistance zone ~ 1.0540.

Second, the Euro shows a possible topping zone between 1.14336 and 1.18704.  The dominant and supporting1 measured moves both have deep retracements, which signals a weak uptrend.  If a reversal happens in my resistance zone, then I would expect at least a 50 pct retracement.  The most recent leg up, off the 4/10 low, shows a shallow MM along with another possible shallow MM.  This is very bullish and could drive prices up into the upper end of my resistance zone.  Any bearish trades will need more supporting data.

Finally, the Dollar Index shows a possible bottoming zone between 94.471 and 93.082.  The dominant and supporting1 measured moves both have medium deep retracements or worse, which signals a weak downtrend.  If a reversal happens in my support zone, then I would expect at least a 50 pct retracement.  The most recent leg down, off the 4/10 high, shows a neutral MM along with another possible supershallow MM.  This is bullish and could drive prices down into the lower end of my resistance zone.  Any bullish trades will need more supporting data.

Heating Oil (final update)

Heating Oil created 3 different bullish patterns in late March.  A double bottom, a MM fade, and a MM pullback.  The targets of the double bottom and the MM fade pattern were both reached.  However, the MM pullback trade failed to reach its target and is no longer active.

April 8 post:
This past week saw heating oil reach its MM Fade pattern minimum objective and its double bottom objectives.  Next up is the MM Pullback minimum target of 1.7122.  Prices are currently above all 4 moving averages, but found resistance at a 461 Fib extension from a small MM pattern.  There's also upside resistance from a volume @ price range between 1.6415 and 1.6720.  In this range, there's a monthly R1 pivot that could cause a pullback.  Over all, this pattern is still looking very good with lower support between 1.6000 and 1.5685.

Gold (final update)

Gold traded into the 1293.30 to 1313.20 range on April 17th, meeting the minimum target, and has since traded back below the 1241.40 low.  This pattern is no longer active.

April 11 post:
Gold triggered a MM Pullback buy entry today with a strong breakout.  It closed above a 4 point downward sloping trend line and was the highest close since November.  Its high was just shy of the monthly R1 pivot and looks to be headed toward my target range of 1293.30 to 1313.20.  Entry price was @ 1259.00 with conservative stop @ 1241.40 and aggressive stop @ 1248.10.

Gold (final update)

This pattern was never triggered and is no longer valid.

April 30 post:
A possible bullish Fib Cluster Pullback trade is developing in Gold.  The Fib cluster zone is currently between 1264.20 and 1253.20.  It contains a combination of 3 Fib retracements or extensions from a dominant MM with neutral retracement and a supporting1 MM with supershallow retracement shown on a daily chart.  Further supporting this zone is a previous 4 point downward sloping resistance line that is now serving as support, a 6 point upward sloping trend line, and a previous swing high trend line.  Prices are still also above both the 50 and 100 DMA's.   A move above 1272.80  triggers a long entry with stops below 1253.20.  Target1 @ 1294.40, target2 @  1300.90, and target3 @ 1307.70.