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. 

Copper (final update)

The head and shoulders top pattern finally reached its objective of 247.30 yesterday after 44 days.  It definitely would have been a tough hold as it took heat on 4 different pullbacks.  However, the market did ultimately trend down making lower highs and lower lows.

T-Bond

A possible bullish MM Pullback trade is developing in the T-Bond.  First, this pattern relates to a MM breakout pattern seen on a daily chart.  This MM has a supershallow retracement, which is bullish, with 4:1 right-handed skewing.  Any pullback within the 38/78 retracement area is considered a potential buying opportunity.  My MM Pullback Zone is from 152.25 to 151.3125.  Supporting this potential pullback trade is that prices are above the monthly pivot and the 50 and 100 DMA's.  We also have a previous swing high trend line serving as support.  Finally, there's a possible double bottom seen on a 240M chart.  We'd need a close above 153.0625 for pattern confirmation.

Gold

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. 

Nasdaq (last update)

The bearish MM Fade pattern is now void as prices moved above 5533.00 today.  

Nasdaq (update)

The following market recap is from my newsletter for the week ending 4/13: "This past week saw prices come off further after establishing a bearish engulfing pattern on 4/5.  The market closed below its 20 DMA on Tuesday and it has served as upside resistance the past 2 days.  We haven't closed below the 20 DMA for more than one day since December, so this is something to watch.  We did find support at the MS1 @ 5351.42.  That level along with the 50 DMA are the next downside obstacles to overcome."  This week has continued to see resistance @ the 10 and 20 DMA's and could be forming a head and shoulders top pattern.  The head of the pattern was formed with a bearish engulfing pattern that lead to a short entry @ 5408.75 with stops @ 5481.50.  The pattern itself is forming in the top of my MM Fade Zone, which is calling for a reversal.  If prices break through the pattern neckline tomorrow, then we would need a close below 5354.25 for confirmation.  Stops would be placed @ 5431.00.  Target 1 would be @ 5245.00 and target 2 would be @ 5208.50.  In addition, another short entry could be placed at my 361/461 Fib combo @ 5344.50 with stops @ 5481.50.  The downside target on this entry would tentatively be @ 5065.50.

Cocoa (last update)

The bullish Cocoa set-up from my original 2/2 post is now considered void and failed to reach its minimum upside target. CLICK HERE for the original post. I'm now focused on another potential bullish MM Fade pattern, but on a much smaller scale than the last one.

Here's the Pattern Analysis: Cocoa might be setting up for a smaller MM Fade pattern with the focus on the move down from the March 21st high of 2188 on the July contract. This recent downtrend has a dominant MM with deep retracement and 1:3 left-handed skewing. The supporting1 MM has neutral deep retracement with 4:2 right-handed skewing. Together they create my Fade Zone (2023 to 1815). Because both retracements are larger than 50%, I consider this a weak downtrend that should produce a nice upside move if a low is established within it. You can expect a bounce to a minimum of the 50% retracement level from that March 21st high and the potential low.

Soybeans

Pattern Analysis: Soybeans have been trading lower since its Jan 18th high of 1092.50 on the July contract.  This recent downtrend has a dominant MM with deep retracement and 7:8 left-handed skewing.  The 1st level supporting MM has medium deep retracement with 1:7 left-handed skewing.  Together they create my Fade Zone (962.375 to 864.625).  Because both retracements are larger than 50%,  I consider this a weak downtrend that should produce a nice upside move if a low is established within it.  In addition, both have left-handed skewing which signals a lack of downside momentum.  Finally, there's a 2nd level supporting MM with supershallow retracement and 4:3 right-handed skewing.  This last piece provides a Fib extension of its own from 974.875 to 941.375.  It's this last MM that could help narrow down my overall Fade Zone.  Overlapping the two gives me the 1st area (960.50 to 941.00) that I will focus on for a possible bullish trade. 

Pattern Update: Yesterday's low was 941.25, which was at the very bottom of the 1st area I was monitoring for a possible bullish trade, just above the low from 8/2/16, and right at my 261/361 Fib combo.  Prices ended up closing up towards its open creating a long lower shadow.  These bullish supporting signals.  In addition, we have a possible double bottom forming.  We need a close above 960.25 to confirm it.  Stops would be placed ~ 948.00.  Target 1 is @ 973.50 with target 2 @ 978.00.  Supporting the double bottom, we have bullish divergence on the RSI and a bullish crossover on the MACD.  In addition to trading the double bottom pattern, you could go long at the 261 Fib combo turn bar @ 960.50.  Stops would be placed below the recent low @ 941.00.  Minimum upside objective would be @ 1016.75.  Upside obstacles include the 10, 20, 50, and 100 DMA's; the monthly pivot; and a volume @ price resistance zone.

Cocoa (update)

Over the weekend, I posted "One area I will be looking closely at is between 1946 and 1918.  In it, there's a 261/361 Fib combo, a 78% retracement level, MS1 @ 1913, and the 361 Fib combo @ 1918.  If this zone doesn't hold, then I feel we will retest the recent lows.  So, for now I'd stay in the long position entered @ 1947.50 and look for another possible entry lower."  Today's low was 1934, which fell right in the middle of my potential support zone.  Buyers came in and pushed prices near the highs creating a piercing line candlestick, which could help trigger higher prices.  The recent sell off caused damage to the bullish case, but there's an opportunity for a low risk/high reward trade.  You could go long @ 1982, which is the 261 FIb combo.  Stops would be below the piercing line candle @ 1933 with a minimum target of 2080.  The target is right around a volume @ price resistance zone and just above the falling window.

Gold (update)

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 (update)

We did find support today between 1250.60 and 1246.80 setting up a potential MM Pullback pattern.  First, this pattern relates to a MM breakout pattern seen on a daily chart.  This MM has a supershallow retracement, which is bullish, with 4:5 left-handed skewing.  Any pullback within the 38/78 retracement area is considered a potential buying opportunity.  My MM Pullback Zone is from 1250.6 to 1246.80.  Supporting this pattern is a 3 point upward sloping trend line and prices being above the 50 DMA, the 100 DMA, and the monthly pivot.  Entry will just above today's high @ 1259.00.  Conservative stop would be @ 1241.40 with aggressive stop @ 1248.10.  Target range would be 1293.30 to 1313.20.

 

Heating Oil (update)

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 (update)

It was a pretty interesting week for Gold.  After confirming a flag pattern last week, we had the makings of a potential upside breakout of 2 MM patterns.  There was also a potential sym triangle pattern forming.  Friday saw the 2 MM patterns activated, but we failed to confirm the sym triangle pattern.  Prices broke higher to only fall back and close inside the triangle.  This pattern is now void.  The flag and MM patterns are still active, however.  Gold is now facing a 4 point downward sloping trend line.  That needs to be taken out to gain any upside potential.  To the downside, there's possible support between 1250.60 and 1246.80.  That could be an area for a very low risk, high reward entry.  If prices trade below 1241.50, then the flag pattern fails along with one of the MM patterns.

Nasdaq (update)

Another bearish trade could've been entered on Thursday below the engulfing pattern from Wednesday.  Entry @ 5408.75 with stops @ 5481.50.  Downside target still ~ 5150.00.  We ended the week remaining above all 4 moving averages with the 20 DMA serving as continued support.  That needs to be breached for the bearish case to take hold.