Morning & evening updates
We chart the S&P 500, crude oil, the Euro, Dollar Index, treasury bonds, and gold, typically with a morning and evening post for every trading day.
Bond briefly poked lower to test the 169^17 support than spent the day rising.
Bonds are attempting to base above 169^20.
S&P 500 futures are vulnerable to a bit of a pullback this morning but prefer it not amount to much, say hold above 3545.00.
After a minor bounce bonds fell back to slightly under the prior day's low.
Bonds bounced a bit and drifted back lower this morning but I think they are in the process of basing and turning up.
I just can't be too bearish in this area of the S&P 500 futures.
Bonds fell down through the moving averages on today and fell to a new swing low briefly dropping under the supports at 171^01 and 170^14 before recovering both.
The big drop in bonds overnight short term looks like an extended fifth of an impulse down from the November 5th high.
What a crazy day. Big run up in the early morning on positive vaccine news.
Bonds fell back to test 173^01 as expected. Was that enough for a (B) wave?
S&P 500 futures declined overnight to just above a support at 3453.25 and began to bounce.
Bonds poked past 175^17 briefly today and then fell back to the moving averages.
Bonds retracing as expected.
The S&P 500 futures have moved up again overnight.
Bonds were quite strong today as they pushed through the daily moving averages.
Bonds stalling a bit against the October 28th high.
Overall the equity market wants to rise though the fear of the election dragging on is holding it back for the moment.
Bonds have had a spike down and strong recovery in the evening not reflected in the following chart.
As I mentioned last night, bonds look lower to a new swing low.
S&P 500 futures have been levitating higher all night.
Bonds are having trouble bouncing making a retest of 171^23 or lower to 171^01 likely.
I've put the alternate count in bonds that I described on the weekly chart on this 240 minute chart.
S&P 500 have continued the late day bounce that started late on Friday.
This drop in bonds forces me to rethink my count.
S&P 500 futures pressed down overnight to a new swing low against 3227.25.
Bonds spiked down into deep retrace support at 172^22 before recovering 173^10.
Bonds appear to be pushing down in the last segment of a B or II.
S&P 500 futures bounced overnight early then began to press lower so as to facilitate a new low this morning.
Bonds are consolidating after poking up into resist at 174^22 and the moving averages as expected.
Bonds managed to push a little higher this morning but still think a retrace is due.
Weekly updates & other posts
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There are already preliminary signs of a breakout
Have had a request for an updated UNG chart listing next supports since it dropped through 16.03 this week so I thought I would put it here. Ideal cycle low this week with supports at 15.21 and 14.82.
Chart updated with additional supports
As expected, bonds have drifted back up to retest resist at 159^24. I favor 159^24 or 160^31 holding as resist and bond prices falling out the bottom of support at 155^11. The Lomb Periodogram suggests bond prices holding up for another week or two before breaking lower.
I'm going to use the weekly UNG chart for the big picture and then switch to the daily natural gas futures chart for the fine details.
I've acquired a cold or flu this weekend and feeling lousy. I ask your pardon if my comments on these charts is a little more curt than normal.
Since bonds have held the 155^11 support for the last three weeks, I'm now leaning toward a retest of resist, say 159^24, before breaking lower in the spring.
Not much change last week in bonds as it traded in the range of the week before and is still holding above the 155^11 support. I suspect a week or two of bounce before breaking lower to at least test 152^25. This correction still strikes me as a little shallow for 'c of (b)' to be complete. I also think the cycles support lower for at least another month.
Many traders will be caught on the wrong footing
We chart resistance targets for the broad NYSE Composite Index
Bonds have been trapped between resist at 159^24 and support at 155^11. I can't guarantee resist will not be tested again before dropping through 155^11 and at least testing 152^25. As it stands, this is too shallow to my eye for wave 'c of (b)' to be complete and cycles suggest the inflection is late January of next year at the earliest.
Cable has been climbing since early September which was consistent with my prior count of a wave (iv) bounce but in October that count started to have problems with overlap. I think the follow EW count looks better and is at an interesting point. Here I am treating the low this year as a (b) wave and expecting a (c) wave advance for wave [iv]. You can plainly see a five wave move up from the low has taken place and now against resistance at 1.3231. At a minimum, bulls should manage, bears can begin to take a position though lower risk, but worse trade location, if they wait for a drop under 1.3028.
159^24 continues to hold as overhead resist in bonds but we have yet to see them really drop away. Doubt there is much movement till after the FOMC meeting this week. I'd really like to see a test of at least 152^25 in February or March of next year.
Yen has dropped steadily from the wave (e) of a triangle target of 90.41. So far, no complaints as it has been on plan. FXY has tested support at 86.71 with the Lomb pulled down where it is...
Bonds have been spending the last couple weeks bouncing from the most shallow of targets for c of (b). I still think it falls lower into the end of the year at a minimum and perhaps out to March.
I'm looking for a higher low to form in UNG over the next couple weeks for a possible wave ii. The dominant weekly cycle is suggesting lower till the end of the year but I think we are pretty close to a window to shop for a cycle low. The daily chart looks lower to put the final touches of [C] of ii. Since this week is short due to the Thanksgiving holiday in the US, from a practical sense it makes sense to shop for a low next week.
Bonds spent last week continuing their bounce from the test of the top of the target range for wave (b). I doubt we have seen the low in wave (b) and expect bonds to press lower in future weeks though I can't guarantee bonds do not challenge overhead resists first, say 161^25.
It still might catch up
Bonds bounced last week off the test of 156^01 which is not a problem for the case for lower into late or early next year. Best for bears that the bounce remain under 159^18.
but a bear is lurking around the corner
Bonds fell last week staying on plan for lower into the end of year or even out into March of next year. Bond prices are testing the top of the target range for 'c of (b)' at 156^01 but I'm not expecting much of a bounce from this level.
Theme in bonds remains lower into March of next year in a 'c of (b) of ending diagonal [v]'. Near term, think wave '[II] of c of (b)' is forming under 161^25 or 163^03 before pressing lower in '[III] of c of (b)'. Probably can use another week or two for [II] to ripen.
Bonds are leaning on support at 159^18. I think it will eventually break under but may not be this week as we have the FOMC on Wednesday and the NFP number on Friday. I think the cycles argue for net lower into early next year at a minimum.
Bonds are sitting on support that may cause a minor bounce but overall expecting lower into the next cycle inflection next February. An alternate count up from wave [IV] could be 'i-ii-[I]-[II]-[III]-[IV]-[V] for iii' and now forming 'iv' which implies a new high in February for 'v of (a)'. I'm not that keen on the alternate but something to keep an eye on if prices fail to drop under 159^18 after a small bounce.
GBP has been on plan rising into wave (iv) targets this week. The futures have a little more room to develop if needed but the FXB chart is pretty close to the limit for a wave (iv). I have also added an alternate on the FXB chart where the drop from the wave [iv] high in 2018 is an ending diagonal where the recent low is wave (i) and is in either (ii) or 'a of (ii)' now.
Bonds had a nice drop from the last chance resist at 165^11. Bears need bond prices to drop under 159^18 as confirmation that 'c of (b)' down is in development. My preference is for net lower prices into the cycle low in mid February next year.
The corrective high might be set
Bonds were pretty energetic last week putting stress on the idea of a lower high in 'b of (b)'. Prices are pretty much at the limit of a lower at a Gann related resistance at 165^11. Because of the strength this week, I'm starting to think a 'b' wave high is likely.
along with cycles analysis
UNG has moved up to test the first weekly resist in what looks like an impulsive move and is now retracing. Will be watching 19.98 and 19.21 as possible wave ii support.
Sterling is dropping from a typical wave (iv) resistance but I doubt wave (iv) is complete as fours are often the most complex patterns. It is conceivable that it runs sideways for months. An alternate would be this is a fourth of lower degree, 'iv', and the next low 'v of (iii)'.
Primary view in bonds is that they are bouncing in wave 'b of (b)' and the bounce last week is probably just the first part of that choppy move. The next major cycle inflection is in January next year which I suspect will be the 'c of (b)' low.
The expected reversal may have begun
Bonds had a nice drop this last week which conforms to the forecast for a wave (b) retrace. Since the FOMC announcement and press conference is on Wednesday afternoon, I suspect we are nearing the end of the first wave of wave (b) at 156^25 or 154^20. Difficult to forecast the end of wave (b), but should make it to at least 150^17. Probably depends on if they intend to only drop into the next cycle inflection in early November, or go for the next in January of next year. I favor the latter but we will see.
As you know, I have been critical of the rise in the Yen over the last month and continued to think it a developing wave [iv] or [b] triangle. Over the last three weeks that has been a strong reaction against resist at 0.009623. Certainly appears that prices are moving down in the early stages of [v] or [c] down out of the triangle. Supports on this chart are Gann based and while I think prices will react to them, it is very speculative at this point estimating where the turns will be in the five wave sequence. It is worth noting that the 'c of (e) of [iv] or [b]' terminated on a cycle inflection which implies a drop to the next in March of next year at a minimum and perhaps out to the following inflection next August.
Opportunities nearby for bulls
Bonds are stalling just under resist at 167^07 but bears need to have price drop under 162^24 to rule out another stab at overhead targets. The indicators are somewhat mixed here as the cycles are pointing lower but the 9-5 study can accommodate another high. I can't be excited about higher but a little early to be seriously bearish.
I have been looking for a possible wave (v) low in UNG for the last couple months and it looks like we may have one that sticks. It has spent the last few weeks up from a test, and brief poke under, support at 18.10. Goal now is to establish a five wave move up for an initial impulse up. Resist at 21.81 and 22.89 on the weekly chart. I'm working on the premise that the dominant weekly cycle is inverting and thus for a net rise into the end of the year.
I like the forming of a doji candle in bonds last week just under resist of 167^07. Both the Lomb Periodogram and dominant cycles suggest softness into October. First step for bears is to drop under 164^00 and even better when under 162^24.
It might already have begun
Bonds are testing the 167^03 to 167^27 resistance area again. I favor fading this test and looking forward to a drop to prior resistance at 164^05.
It's already retreating from calculated resistance
Well, now that bonds moved past the prior high in 2016, what does it mean? It means that the ending diagonal is growing larger and that the move up from the October 2018 low should be comprised of three segments. On the scale of the ending diagonal, spanning ten years, we have yet to see an appropriate sized corrective move for the middle segment of [v], thus must see the current rise as the first segment, (a) of [v].
Bonds have run up to just short of the 2016 but it is holding under it so far. I prefer a lower high to 165^04 but if it pokes to a new high, I will just call this the end of a larger diagonal. Ideally, prices use 162^30 as resistance and fall back to 159^04 or 156^01. Bears need bond prices under 156^01 to take a new high off the table.
Yen has rallied up with gold but I still think the overall Elliott triangle is still valid. It looks like the dominant weekly cycle will be invert and be a high. The ideal cycle infection point is September 13 but we are already in the window. First step for a reversal would be falling under prior resist at 0.009386.
EWZ is in the resistance zone
The upward correction probably won't shoot much higher
The idea of a lower high in bonds is certainly under stress as bond prices are nearing the 7/8th retrace at 161^09 which is the practical last chance for a wave [ii]. 160^14 which is a fib extension is worth paying attention to early this week.
My contrarian frame of mind has me thinking that GBP is working on a major low. Monthly and weekly charts below.
As you know, I've been watching UNG for a possible significant cycle low nearby and expecting a rise into early next year. While prices have slipped a little lower, that is consistent with the main forecast on the daily chart from the last update. UNG is now near weekly and daily supports and is worth monitoring closely.