The typical “Day Ahead” post includes charts and commentary for the S&P 500 Index (SPX), 30-year U.S. treasury bond futures, gold futures, Euro futures, crude oil futures, and the U.S. Dollar Index.
The S&P 500 spent all day in a consolidation yesterday closing just above support. That means we should still expect a new high in SPX before this pattern completes.
It started a little rocky right at the open but the S&P 500 got it back together and ran up to and a bit beyond the expected targets for the day. Today, might have a minor consolidation but overall have a bullish bias to test 2814 and perhaps 2826 early next week.
The S&P 500 stayed on plan yesterday as it ran up to 2808 early yesterday and fell apart. The problem is that the drop only appears to be a three wave decline thus far, and thereby prone to a deep retrace if not a new high. Will see if there is any interest in a lower high around 2793 or 2798 today.
The S&P continues to push ahead in what to my way of thinking is in accordance with a third wave move. Prices have moved up to the next harmonic of the Schiff Channel on the weekly chart.
Today is a holiday in the US and will only have a half day of trade which should be muted.
The little spurt up in the last hour likely means that the S&P 500 will see 2771 today if not 2780. Crude is lower this morning and may be in the early phases of a sizeable correction.
An attempt was made yesterday to get a correction started in the S&P 500 but was unable to continue lower by mid morning making at least a deep bounce up if not new high possible. There is still a chance for bears to take back the ball but they will have to strike early today or cede a new high to bulls.
he news that China may slow down or halt buying US treasuries has added a bit of volatility overnight. Bonds are pressing down as had been expected. Gold pushed up to test overhead resist which is also not a big surprise. Euro bounced but think it should form a lower high to that of January 4th. In the S&P 500 today, will have a gap down and reasonable to have an initial attempt early to try to back fill the gap but hope to see it fail and drift lower later in the day.
The S&P 500 had a mild correction right at the start of the day yesterday then proceeded to creep up the rest of the day. The advance from the end of the year should be nearing completion, and that high is a candidate to mark the end of a larger fractal. First step is to have price slip back 2742 SPX.
The S&P 500 futures spiked up on the Sunday evening open and have been drifting lower during the European morning. This may cause a small gap down in the cash open but expect it be filled before an attempt is made to push lower.
The S&P 500 will likely start with a gap higher this morning and a good idea to allow a modest follow through higher before seeing if it starts to slip lower.
The S&P 500 pushed past the round number yesterday. Now we see if the Dow can make it to 25000 today before the NFP tomorrow. I still think we are nearing the end of this part of the advance from the 2016 low.
Traders were eager to buy the equity indices yesterday as expected. The primary view remains that the S&P 500 should at least test 2700 if not make a small excursion past it before turning lower. Normally I'd say that they aim for that ahead of the NFP on Friday but I am a little concerned about how the market reacts to the FOMC minutes today at 14:00.
Traders will start to roll back in from the holidays this week. We will see if the drop late last Friday was real or just a head fake early this week. I suspect it was a head fake and they still try for a new high late this week.
The move up that I was looking for yesterday in the S&P 500 waited till the last trading day of the year. Futures were just a couple points short of 2700 before falling back a bit as I type. Expect 2700 to be tested in the day session today. Hope you all have a great 2018. See you next Tuesday morning.
The S&P 500 continues to trade sideways in a holding pattern. Short term, think it wise to allow a test of 2700 SPX but bigger picture still think a larger correction is due, which itself may turn out to be a sideways formation just with a wider range.
Pretty dull trading yesterday as expected for this week aside from crude oil which is pressed onward toward a new swing high.
The markets usually are muted during the week between Christmas and New Year's Day. If the S&P 500 was going to hit 2700, one would think they would have done it by now. From here on out, my default bias is going to be mildly negative unless there is a short term pattern to the contrary.
Is the S&P 500 giving up on 2700? Let us see if they can test the rising trend line today. I'm not counting out the possibility of 2700 until the trend is broken. Today is a full day but expect the market to go into the doldrums pretty quickly today. Hope you all enjoy some time with family and friends over the next few days. Will see you on Tuesday.
We are quickly reaching the traditional slow period between Christmas and New Year where many go on holiday. Even now I suppose many are checking out early and tracking down the last few gifts on their lists. I think this thinning out of traders is still positive to attempt to test 2700 SPX. If they don't replay yesterday with a quick sell from 2686 SPX, expect a push to 2693 if not 2697.
Yesterday the S&P 500 elected to pullback before testing 2700 but still think it can be tested before a more substantive pullback kicks in. The SPX open is probably between 2697 and 2691. As long as they don't set a lower high against 2691 SPX, look for a rise to just under or just over 2700 SPX today or tomorrow.
The S&P 500 ran up to the expected target range quickly yesterday then traded in a tight range sideways. Today, expecting them to flirt with 2700 SPX. Crude remains on track for an attack on 60.00.
S&P 500 futures are following through with the rise is cash on Friday by being up this morning such that there is a good chance of a gap up on the NY open today. Thus, prices are pushing up against the upper end of the weekly channel shown below.
The good news is the S&P 500 finally hit an air pocket yesterday though it was slow getting started. The bad news is that it is not yet a clean break lower out of the up trend from mid November and thus need to give it a chance to bounce today. Ideally we get a lower high form against 2662 or 2669 SPX later today or on Monday. If not, you know the drill, SPX will inch toward the top of the channel that has been pointed out yesterday.
The FOMC raised a quarter point as widely expected yesterday and the equity markets so far have taken it well, trading sideways. I remain stubborn and perhaps a broken clock at this point, but still think the equity markets are nearing at least a protracted stall. As can be seen from the following weekly and daily SPX charts, the market is near the top of a channel up from the 2016 low.
Will the S&P spike up in an attempt to reach the top of the channel or will they finally retrace? I favor lower but we will know soon enough. Very short term, expect a mild drift higher into the early afternoon before going sideways into 14:00. Be mindful that there is also a press conference where the Q&A can cause volatility.
The US equity markets are doing what has been the norm of late, rising into the FOMC meeting. I continue to think this is a wave (iii) forming near the top of a large channel as can be seen in the chart below. Crude is on track to make a run at 60. DX and Euro are taking small steps in their rise and fall in line with forecast. Gold is getting a head start on the expected break lower. Bonds have been stubborn but also trying to leak lower in line with the forecast.
With just a few more days till the FOMC statement and press conference on Wednesday, most markets can be expected to begin to trade in narrower ranges. I think it best to keep a mild bullish bias in the S&P 500 though a new high is not a sure thing.
The S&P 500 advanced to the next resistance level as expected at 2641. Now if they like the NFP number the S&P should continue to advance another 10 points or so. On the other hand, if not, expect price to test the low from last Wednesday and later the low from the start of the month. Bonds, DX, Euro, and gold probably pause till after the FOMC meeting next week.
The S&P 500 did bounce yesterday as expected. Overall think they should continue to trade in a choppy upward manner today. The overall theory being that the equity market is reluctant to make a major move in front of the NFP data tomorrow morning and the FOMC decision next Wednesday. In other markets, gold continues on track by dripping lower though is closing in on a speedbump at 1251 that can support it till the FOMC meeting. Crude is also near support this morning which should provide a springboard from which to push to one last high for this major swing.
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With the USD weakness that we have being seeing over the past few weeks, it is a good time to update the monthly and weekly charts on both the main and alternate EW counts on a popular ETF for USD, (UUP).
Bearish scenario still in the lead
Price is putting stress on a supportive trend line, forcing a squeeze between support and resistance.
Here’s a compilation of the open gaps in the S&P 500 and the Dow 30 since last September.
Since I just updated the DX monthly and weekly charts, thought I would plough ahead and update the ETF UUP as well. Same story, expect a wave (iv) has been set and looking for a new high over that of the early 2017 high in the next 18-24 months.
Just refreshing the long term charts on the Dollar Index (DX). The forecast is unchanged in that I think that that the Dollar has at least one last high left in it over the next two years.
Right now the bearish case looks best
UNG, the ETF that tracks natural gas, has elected to take the alternate path from when I last posted these charts by pushing to a new low under that of the 2016 low. The dominant cycle has shifted a...
I've been asked for an update on GBP and since the equity indices should quiet down over the next 1.5 hours till the FOMC statement, think I have enough time to get this done. Overall think GBP, like many of the major USD crosses, has spent the last year correcting up in a wave [iv] and should be close to pressing lower in a wave [v] over the next 18 months.
Catching this decline and bounce in stocks might be easier than trading the metal itself.
I have included charts of this ETF, GDX, in the last couple of gold posts and thought I should make a separate post on it for completeness sake. The main hypothesis shown on the following monthly and weekly charts is pretty similar to that of gold except that I am assuming an ending diagonal here as opposed to a simple impulse lower essentially allowing for a couple retests of the of the early 2016 low before a climb out of the hole.
Signs that this triangle pattern can break downward
The wave count that I last had on the big picture in gold just didn't sit well with me and have put some thought into it over the weekend. The overall main and alternate ideas in general are the same, it is more of just a technical wave counting issue.
I find the iShares MSCI Italy ETF interesting for two reasons. One, so far, it is a textbook example of a triangle formation that has spanned nearly nine years. Two, if the triangle pattern holds and the Italian markets turn down, could that be a precursor to other European equity markets topping and even mark a turning point in the Euro? I don't know if the triangle pattern will hold or if it will be an early warning to other problems on the continent, but it does look like a trading opportunity is nearby.
Happy Thanksgiving! I thought I would see if I can sneak in a little analysis before slipping into a turkey induced coma.
We think it's time for the downward trend to resume
A sizable correction is due
I went ahead and did the copper analysis for the respective ETN. I've added some additional chart geometry and the Wave 59 9-5 study to the monthly chart but otherwise the story is the same as for copper futures.
Up until the middle of next last month, I had been treating the rise in copper as a deep wave four but I am promoting the alternate to primary, an initial impulse up from the early 2016 low. That does not mean that I changed my mind about this advance ending, but that I have thrown in the towel on expecting a new low on a turn lower.
I have been putting off a bigger picture gold post as I have been reevaluating the big picture EW counts. Let me start with the two scenarios I had been using and move on from there.
The bond charts look favorable for a move lower into next year. The alternate is that the wave (ii) is not yet finished though it is becoming a more distant possibility.
The outlook for UNG has not changed over the last few months. It has failed to rally much but then hasn't fallen either. Still favor a bounce that can test the highs from last year.
As you would expect, the analysis here is very similar to that done on bond futures earlier. This looks like a wave (ii) bounce though it is too early to rule out another test of overhead resistance.
The major theme in bonds for the last six months has been that we are in a wave (ii) bounce after the first major impulse down from the 2016 high. A break of the low of last month should be the first major confirmation that bonds are ready to turn down.
The index can climb still higher after a modest correction
The theme from when I posted these remains the same from about a week ago. I just added the next steps up in the charts to keep an I on.
The Russell 2000 is in a similar position as most of the other major indices. Probably in wave (iii) of [v] up from the 2009 low. This implies one more down/up move before any serious correction sets in.
Counting an Elliott fourth wave in the upward progression
To my eye, grains are in an ending diagonal or wedge in the latter stages of its development. Let us start with the ETN JJG which I think has the same ending diagonal form as wheat and corn but where a wedge is easier to see.
Updated weekly chart but very little change from the earlier post here which you should read as a reminder of the possibilities. The most noteworthy difference is that the cycle detection is focusing on a shorter cycle which has the ideal low at the end of September.
I know that I just posted these last week but made slight changes to the targets on the weekly chart and think that the broader market is on the same path, closing in on a summer low.
XLY is on plan correcting as expected. Can use a little lower over the next week or three to test ♦♦.♦♦ to ♦♦.♦♦ after which we see if they can muster enough energy to push to a new high, the main scenario, or if any bounce sets a lower high, the alternate.
We still believe a low is nearby, and this post explores some ways to trade it with the expectation of a bounce.
I just can't get excited about this move up in copper as being the start of a major break higher. Instead, I still see this as the calm before the storm. Primary count is this being a wave (iv). I've marked the zone of overlap where wave (iv) would be invalidated. I can tolerate a brief spike into that zone but not a close.
This is a post to consolidate the various Euro oriented charts that I have been working on over the last week or so. The main hypothesis is that this is a wave (iv) that is nearly complete. In this...
The Euro ETF has moved a bit higher than we anticipated in our June 16 post, but bears have a strong chance of countering the rally and taking price to new lows.
GPB has fallen from what I am calling a 'B' wave high in 2014 to a low early this year and been bouncing in a overlapping move to the present. Since the assumption that this drop is a 'C' wave, it...
Now it appears that rates may be ready to begin advancing again.
We are watching natural gas prices very closely right now. The technical picture makes a strong case to expect a reversal and rally soon.
The dominant weekly cycle in UNG is bottoming out now and starts to turn up into early 2018 making it interesting to see if a higher low or test of the previous 2016 low takes place over then next...
Since I have started to think that the low in crude is in, I thought I would update the charts for likely the most popular ETF for crude, USO. The monthly chart has a fork placed in a similar way to...
I had been expecting a new low from the bounce high in crude from late last year to develop this year. I had been treating that high as a wave four in an ending diagonal which calls for two motive...
The Euro moved up over first resist and now up against a deep retrace value and near a trend line. I am working with an ending diagonal for form. Depending on where wave (iv) ended gives solutions...
Over the last two weeks the yield made a brief poke under the .382 retrace of the advance from a year ago and recovered it this week. I continue to think yields rise though it does have to break...
I'm skeptical that copper has found a lasting low but has yet to drop impulsively from resistance tested earlier this year. Prices have fallen from the channel and other resistance from February but...
In general, have been thinking that natural gas has been feeling its way to a higher low to that of 2016 and still think that is the case. The alternate count is that the late 2016 high was yet...
Since the Dollar index is at an interesting juncture, it makes sense that the Euro would be as well. There is no change to the theme from the last time I posted the Euro charts, just minor changes...
Since we have the FOMC later this week, this seems an appropriate time to post these charts. Net, they are sitting on support and have a shot at testing 29.93 quickly with more after that. If they...
The dollar has been dropping from the start of this year. Does that mark the dollar high? I think not but do think that the advance is slowing and therefore not expecting dramatic gains. The main...
The choppy rise from the turn of the year appears to have been corrective, in this case meaning that it should be treated as a retracement.