Nasdaq (Update)

It's been a couple weeks since my last post regarding the h&s pattern.  Since this pattern was confirmed we had a retest of the downward sloping trendline.  Prices rejected off this level along with the 10, 20 DMA.  We now have a 3 point downward sloping trendline, but are at a crossroads of future moves.  On the one hand we have confirmation of a h&s top.  On the other hand we have a possible falling wedge forming.  The right shoulder high is the first key level of resistance @ 2260.33.

NASDAQ (update)

Friday's close @ 2091.79 confirmed a weekly head and shoulders top and was below the 50 and 100 DMA's.  The prior swing low of 2100.17 was also taken out confirming a change in trend.  We no longer have higher highs and higher lows on the weekly chart.  The next swing low for possible support is 2024.27 and the recent swing high of 2341.11 will serve as possible resistance.  The target on the head and shoulders pattern is ~ 1732.00. 

Nasdaq Composite

We have a possible weekly H&S Top pattern forming on the Nasdaq cash index.  A weekly close below ~2139 will confirm it.  The LS formed with left handed skewing (3 bars down: 5 bars up), which showed some weakening upside momentum.  The HEAD formed around the weekly 261/261 fib extension combo combined with a 78.60 retracement level and overbought RSI.  The potential RS is forming around a 50% retracement level, which is neutral.  If we can get confirmation this week, then we will have right handed skewing (2 bars up: 1 bar down).  This will show increasing downside momentum with a H&S target of ~1735.  Plenty of obstacles lie in its path, however.  First, you have the 50 and 100 DMA's.  Then you have the 38.20, 50.00, and 61.80 retracement levels.  Finally, you have numberous fib extensions. 

In summary, we are still in an uptrend.   However, if the pivot low of 2100.17 is taken out we will no longer have higher weekly highs and higher weekly lows.  This will signal a trend change and a correction will take place.  The new question will be how low do we go.  The weeks to come will give us better clues, but the H&S top target is one early potential zone.

Dollar (Update)

The dollar has continued to sell-off from the resistance zone from a few days ago.  Today it closed below a significant uptrend line (9 points).  If we take out the previous pivot low of 85.325 you will no longer have higher highs and higher lows in place.  This would signal a trend change.  I expect the 78.60 retracement level to be tested and provide some support around 86.10. 

Euro (Update)

Today we formed a High Close Doji pattern as we closed at 1.2096 (above the doji high of 1.201) got a bullish MACD crossover.  However, we still are waiting on a stochastics breakout (may come tomorrow) and closed under the 10 DMA (suggested yesterday as a possible resistance area).  I think we can move higher from here, but I still would look to sell rallies in this market.

Below is a snapshot of the Euro on an intraday chart (60M):

This rally has taken the route of 5 significant measured moves.  The first 3 all have deep retracements (~78.60%), which is indicative of a weak trend.  This usually sets up a good countertrend trade, which in this case would be in the direction of the longer trend- down.  Depending on what happens overnight some possible resistance zones are: 1.2190-1.2200, 1.2225-1.2255, 1.2280-1.2300, 1.2315-1.2330.  The 1.2225-1.2255 area may present a good place to get short.  I don't expect 1.2330 to be taken out without a significant correction.

Euro (Update)

We failed to get upside confirmation today.  The market rallied overnight and most of the day only to sell off pretty hard in the final hour.  We are looking for a close above 1.201 to initiate a High Close Doji pattern.  While today's close fell short, tomorrow is another day.  The 10 DMA is lurking overhead around 1.2095, which will present the first line of resistance.

Euro

Is it finally time for a rally in the Euro? Today we got a star doji candle pattern on the daily chart.  This pattern formed just slightly above the DS1, MS1, and WS1 pivot points.  There is also a 461/461 fib extension average @ 1.1877 (low two days ago @ 1.1874) combined with RSI price divergence, RSI oversold, and MACD loss of momentum.  If we can get some upside confirmation overnight and tomorrow, then we could see a decent rally.

Gold (Update)

On May 22nd, I wrote that we were in a potential cluster of support and would be confirmed if we got some follow through buying.  Well, we have rallied nicely from that cluster around 1168.00 up to a high of 1252.10 today.  I'm attaching an updated snapshot of the June contract (front month now August) for comparison purposes.  August Gold looks poised to test 1275-1285 area.

Dollar (Update)

Back on May 22nd I gave a couple possible support zones.  The first zone (85.25-85.40) held and we have been moving higher since.  We had an ascending triangle breakout on June 4th, but the market ran into some fib resistance in the 88.7508-88.8275 area (actual high was 88.80).  You have some conflicting signals at these levels:
Bullish:  still maintaining two upward trendlines (shown in red); still above all moving averages (10,20,50,100); still making higher highs, higher lows.
Bearish:  hit some stiff fib resistance ~ 88.80 (461/361 extensions); RSI price divergence signals warning; MACD showing loss of upside momentum; ran into pivot resistance yesterday (DR1,MR1,WR1).

DOLLAR (Update)

We got a bearish engulfing pattern on 5/19 in an area of stiff resistance.  We have seen some follow through selling the next two days.  Friday saw a close below the 20 DMA.  We have an upward sloping trendline and the 50 DMA coming up to offer some support.  We are currently at a crossroads in this market.  Will we retest the recent highs or continue lower.  I wouldn't be surprised to see a retest at some point, but the last 3 days has seen strong selling.  The 78.60% retracement zone will probably need to be tested before any significant downward moves are made.  We can also look for some potential areas to get long on this pullback.

Possible support zones:
Zone 1:  85.25-85.40  current zone
Zone 2:  84.60-84.80
Zone 3:  83.80-84.05
Zone 4:  82.75-83.00

GOLD (Update)

Gold has sold off strong from that resistance zone I mentioned a couple weeks back.  I didnt' think it would come off as hard, but I still like Gold to move higher.  It found some buyers on Friday in a fib cluster support zone combined with a 50 DMA.  Let's see if you get some follow through buying in the next couple days.  The next solid support zone is around 1144-1150.  I don't expect Gold to move below this area with another attempt higher. 

SUGAR (Update)

Friday's price action saw the 15.50 level taken out.  This was the last swing high on the most recent move down and signals a reversal in trend direction.  We now have stopped making lower lows and lower highs.  The key will be if it can continue higher.  The next major hurdle to break is 17.85.  However, there will be stiff resistance on the way to this swing high. 

Let's analyze the recent move up off the 13.00 low.  It has made two major retracements seen on a 120M chart.  The first one was medium deep and the second was very deep.  Both had right hand skew breakouts.  This gives us conflicting signals.  The deep retracements signals a weak up move, but the right handed skewing signals strong upside momentum.  Given the major weakness over the past few months it doesn't surprise me to see these deep retracements as it seems to keep trying to shake off the weak bulls.

Let's look at some potential resistance zones to take profits on longs or get short if you feel another move lower:
Zone 1  15.90-16.05 could get a minor correction
Zone 2  16.25-16.35 (not to exceed 16.50); could get a nice correction
Zone 3  16.66-16.75 (not to exceed 16.90); could get a nice correction

Sugar (Update)

In my last post for Sugar I wrote "If 15.50 can get taken out, then you will stop the lower highs, lower lows that have been seen on this most recent down move. This would give some confirmation that a short term bottom is in place."  The low of 13.00 has continued to hold since May 7th and today we closed at 14.93.  The next upside target is 15.50.  If we can take this high out, then we may make a run at 16.80.  This is the 78.60 retracement level from last swing high.  This should offer up some stiff resistance.

DOLLAR

We had a shooting star pattern form on Monday, but got no confirmation on Tuesday.  Well today we got an engulfing pattern in the same resistance zone as the shooting star formed.  RSI was extremely overbought and just crossed back below this zone.  MACD shows slowing momentum.  The bullish nature of this rally may cause this market to dance sideways in a choppy manner before going lower.  At any rate, you are finally getting some bearish signals.  Let's see if we get some follow through selling tomorrow.  I would sell below 86.045 with a stop above 87.625.

DOLLAR (UPDATE)

We couldn't get downside confirmation today on yesterday's shooting star pattern.  This pattern is off the table.

GOLD (update)

Gold is still retracing from that resistance zone I mentioned a few days back.  I expect Gold to continue to move sideways and down a bit before moving back higher.  I will be looking for areas to buy on this pullback, but have no target zones currently.

DOLLAR

The dollar index formed a shooting star candlestick pattern today.  A potential short term top may be in place here as this pattern formed in a solid area of resistance.  There is cluster of fib projections in this 86.25-87.25 zone combined with DR1, DR2, WR1 pivot points.  RSI is in overbought territory (warning signal only as can stay overbought for extended period) and MACD shows upside momentum is slowing.  Let's see if we can get downside confirmation tomorrow.

GOLD (UPDATE)

Gold ran into the lower end of the 1244-1264 resistance zone and sold off a bit.  I don't expect too big of a retracement before we move higher.  The recent up move has shown acceleration the past couple weeks.  I look for Gold to dance sideways possibly for a few days before making a move through 1252.  I think Gold maybe heading to the 1285-1305 area.  If so, this could be a nice area to short.  We will have to watch price action as it approaches this area for more clues.

GOLD

Gold is now approaching some resistance levels and is worth watching for a potential place to short.  The first zone this market may see some selling is 1244.00-1264.00.  There is a nice cluster of fib extensions from patterns seen on weekly charts, daily charts, and intraday charts all in this zone.  Weekly R2 is also in this area @ 1152.33.  There are no sell signals showing on either the RSI or MACD yet.  RSI is in overbought territory, but giving no signal.  MACD shows momentum still rising to the upside.  It will be interesting to see what happens as Gold approaches this zone.

SOYOIL

There was a buying opportunity in Soyoil on Friday around 37.75.  This level contained a 78.60 retracement and a 361/261 fib extension cluster.  The two main structures both had deep retracements and left handed skewing, which signifies a weak downward move.  You could either buy in this area with a stop below the 36.70 swing low from Feb or if you wanted a tighter stop placed it below 37.40.  The best place would've been below the Feb swing low.  Due to the deep retracements you should get a good bounce higher.  First target area should be around 39.25-39.50.  Second target area should be around 40.75 (78.60 zone) and final target area should be around 42.65 (127% zone).

SUGAR (Update)

Sugar wasn't able to rally Thursday and showed weak price action so I got out of my Long position at breakeven.  Another buying opportunity shaped up on Friday morning however.  There was a solid fib cluster or support around the 12.90-13.05 level.  You had the dominant structures 461, supporting 1 structure 361, supporting 2 structure 361, combined with DS2 and MS2 all in this zone.  You also had price divergence seen on 120M chart and got MACD confirmation later with a bullish crossover.  If these lows can hold, first target area is around 14.65-15.00.  If 15.50 can get taken out, then you will stop the lower highs, lower lows that have been seen on this most recent down move.  This would give some confirmation that a short term bottom is in place.

SUGAR

I got Long 2 July Sugar futures @ 14.05 today.  There was a buy set-up seen on a 240M chart.  The dominant move was a double top and it's first supporting structure had a deep retracement and severe left handed skewing (both weak).  The second supporting structure had a supershallow retracement, which gave this down move some extra steam.  The first solid area for a potential buy was in the 13.70-14.15 zone.  To further narrow this area you can look at a smaller time frame.  If you look at a 15M chart you will see this buy zone will shrink to 13.80-14.00.  I got in a little aggressive @ 14.05 and the low of the day was 13.86.   You can see a double bottom formed on the 15M chart.  A lower low was made with RSI divergence.  You then got a confirming signal with a MACD crossover.  If you look at the daily chart, then you will see a hammer candle formed.  Price action fell through DS2, WS2, and MS1 before closing above all three.  This gives further support for this hammer formation.  This is a good example of what creates a candle pattern.  Here we got a solid cluster of fib support near 3 pivot points causing price to reject off the lows and close in the upper range.  We need to see some follow through buying tomorrow to support this bottom.  Stops moved up to one tick below todays low.

EURO (UPDATE)

Support Zone #2 provided a solid bounce today in the Euro.  We rallied a full handle off this area for a nice intraday play.  Market then proceeded to sell off hard in the final hours and close back near its lows of the day. 

EURO

There some possible low risk/high reward buy zones shaping up on the intraday Euro chart.

You have a potential buy zone seen on 240M chart between 1.2855 and 1.2750.  If you go down to a 15M chart you can help narrow this zone down to 3 areas. 

Support 1 has a solid fib cluster of support combined with a DS2 pivot.
Support 2 has the dominant 261 fib extension seen on 240M chart and two 461 fib extensions seen on 15M chart.  This could be the zone that full stretches out the local move down.  You also have MS2 just below for further support.
Support 3 is the lower end of the zone.

These areas will become obsolete if wider time ranges are made before these zones are hit.

S&P 500 (Update)

Today's strong sell-off confirmed a H&S Top and Sym Triangle pattern.  Both targets are in the 1140-1150 zone.  I see this area shaping up as potential support.

COCOA (Update)

The Cocoa short trade is off the board right now.  Today's strong sell-off nullified some of the fib extensions.  I will update this market later if warranted.

COCOA (DAILY)

There's a potential sell set-up on the July Cocoa daily chart.  The dominant and first level supporting measured moves both have very deep retracements, which signals a weak start to a trend.  The 2nd level supporting structure is super shallow, which signals an increase in momentum.  There are 3 potential sell zones shaping up:
Zone 1:  @ the 261/261 fib combo of the dominant and first level supporting structures sandwiched between another 261/261 fib combo seen on an intraday chart.
Zone 2:  @ the weekly 78.60 retracement level, which is supported by the first level supporting structures 261 fib extension, the second level supporting structures 261, and sandwiched between two 361 fib extensions seen on an intraday chart.
Zone 3:  @ 361/261 fib combo of the dominant and first level supporting structures sandwiched between a 461/461 fib combo from an intraday chart.

The strong bullish move the past couple weeks lends more weight to shorting around zone 2 or 3 and not zone 1.  RSI is approaching overbought territory and the MACD is showing a loss of momentum.  When this market sells off, it sells off hard.  So this could be a very good short if you can catch it pretty clean.

S&P 500 (intraday)

Solid resistance zones are shaping up on the ES 15M chart.  There is a potential butterfly sell set-up around 1191-1192; a solid fib cluster of resistance ~ 1194.25-1195.50;  and an even stronger fib cluster of resistance ~ 1196.75-1198.50. 

Market is in a bullish mode on weekly charts, but consolidation on daily charts.  It's a battle of bulls and bears right now to new short term direction.  Today could be a good indicator on who will gain control.  So far the bears are setting a strong defense from 1191-1198.  Let's see what happens.  News out @ 9am cst.

S&P 500

Alot will depend on how the market reacts to the Greek situation this weekend, but as of Friday's close it looks like we may finally get a correction.  First, price ran into resistance at a solid fib cluster.  Second, this cluster got confirmation from MACD and RSI indicators.  Third, we got some bearish candlestick patterns form up in the zone (harami, engulfing).  Finally, we have a potential H&S top forming.  The strong bullish rally of the past couple months made the high tough to pinpoint.  The market needed to shake off the bullish energy by grinding sideways the past couple weeks.  We did get a chance to get short on the harami pattern last week.  All depends on how we react to the Greek news, but if we continue to sell off then I see a potential support zone shaping up around 1143-1149.

EURO (UPDATE)

Resistance zone 1 caused a nice downward move (88 ticks).  The higher resistance areas may still in play depending on what happens overnight.  Also, it will be interesting to see what the Euro does as it opens up tonight with the Greek meeting over the weekend.

 

YEN and EURO support/resistance zones

We have a few important economic reports out this morning so these zones may zone quickly.

YEN:
There are currently 3 possible major support zones seen on 60M chart.  The dominant structure has a supershallow retracement, which is bearish.  However, the skewing is strongly to the left which signals weak momentum.  You may see decent bounces in these support zones, but the overall trend is still down.  Don't overstay your welcome if going long.

EURO:
There are 3 possible resistance zones shaping up on the 60M chart.  The dominant structure has supershallow retracement, which signals bullish strength.  If long, these can be good areas to take profits.  The market is currently near the first resistance area.  I don't expect much of a reaction, but news is pending.   Resistance 3 is the strongest zone and will be tough to break without a decent correction.

YEN (UPDATE)

Well, we got a small bounce off Buy Zone 1 (38 ticks) and then another bounce off Buy Zone 2 (45 ticks as of this posting).  I would move my stop to tick below low of the day @ 1.0604 and see if you can get a nice move up.  Initial target can be based on fib retracements combined with fib extensions.  I would set Target 1 ~ 1.0670 and Target 2 ~ 1.0690 and let any remaining contracts ride with trailing stop.

SUGAR

There's a possible Buy set-up in July Sugar seen on a 60M chart.  First, on a weekly chart you have the 78.60 retracement level ~ 14.70.  This can be a very powerful retracement zone.  To further support this area you have solid fib support seen on a 60M chart all the way down to a 5M chart. 
Buy Zone 1 ~ 14.60-14.80
Buy Zone 2 ~ 14.40-14.55
Buy Zone 3 ~ 14.00-14.20

One of these areas may produce a major bottom in Sugar.  Buy Zone 1 contains the 78.60% weekly retracement level so let's watch this zone closely.

YEN

Possible Buy set-up in the YEN on a 15M chart. 
Buy Zone 1 ~ 1.0615-1.0620
Buy Zone 2 ~ 1.0598-1.0605
These zones have solid clusters of fib support.  Also, the two main measured moves both have deep retracements, which signals a potentially weak downtrend with a good chance of a big bounce.