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.
Bonds started off soft but best to look for them to firm up around 176^01.
The positive NFP numbers are helping the futures hold up which is a bit of a problem as a new low under yesterday near 3410.00 in S&P 500 futures would be a better place to buy.
Bonds continue to stay on track having pushed a bit over the daily moving averages today.
Bonds have been rising this morning as the equity indices start of soft.
S&P 500 futures have been slipping overnight thus resulting in a weak open.
Another good day in bonds as they stay on forecast by moving higher.
Since bonds have push above 176^12, bias is up to at least 176^31, maybe even 177^20.
S&P 500 futures were enthusiastic overnight.
Nice move up in bonds today but nearing resist at 176^22 and the daily moving averages just above.
Bonds are correcting a bit after almost reaching the 175^29 resist area.
S&P 500 futures fell away from a deep retrace this morning at 3516.25.
No complaints about how bonds performed today.
Bonds doing a good job grinding through initial resist at 175^08.
Nice to see S&P 500 erase the Sunday evening gain.
Bonds rising from a support at 178^13.
While it is true that S&P 500 future went on to make a new high overnight, I don't think higher is that easy today.
Bonds reacted negatively to the Powell speech today but I just can't be very bearish just yet.
Bonds under pressure after the Powell speech but I have difficulty being bearish.
The S&P 500 futures seem to approve of Powell's speech at the Jackson Hole Symposium and are rising up from old resist turned support at 3470.50.
Bonds initially slipped lower today to retest support at 177^17 but overall I think they are holding pretty well considering the strength in the equity market.
Bonds have been under a little pressure but still think a bounce or more is due.
S&P 500 futures held up overnight thus looking for a minor new high today around 3452.25 to 3456.00.
Bonds were under pressure today dropping under 178^22 to retest support at 177^17.
Bonds under pressure this morning but I think they firm up against 177^25.
S&P 500 futures ran higher overnight but look to start the day session with a retrace to at least 3427.75.
Bonds are having a little difficulty punching through resist at 180^06 and the daily moving averages but are holding well.
Bonds have been holding just under the 179^29 resist.
Positive Covid treatment news popped S&P 500 futures on the Sunday evening open over the March high.
Bonds reacting a bit to resist at 179^29 this morning by dropping toward resist at 179^00 as I type.
S&P 500 futures fell overnight but reclaimed a foothold just under 3362.25 and bouncing up this morning.
Weekly updates & other posts
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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.
Very busy week coming up with the FOMC on Wednesday afternoon and the NFP numbers on Friday morning.
out of an Elliott wave triangle
Since bonds do not have a clear five wave impulse down from the rejection of 156^14, I think it best to allow for an attempt to retest resist again into the FOMC meeting. Overall the cyclic position suggests the rise up from last year is late in development.
Making a UNG update since I spent time staring at the daily. First, the weekly chart. Nothing new from when I last posted it. I think UNG is trying to feel out for a low in the 62 week cycle. Price needs to be over 21.65 to cause bears to cover.
At the start of 2018, EWI ended wave [e] of a triangle and dropped in the first five wave impulse lower at the end of last year. Since then, EWI has been bouncing in a three wave move for a wave (ii). While having tested a possible target at 28.83 two weeks ago, it strikes me as too aggressive to say that wave 'c of (ii)' is complete while above 30.00 as the overhead target tested so far is a bit short of what is typical for a wave (ii).
Treating this overlapping bounce in EWZ up from the low last year as a 'b' wave and expect prices to turn down again in an impulse over the next few weeks.
Traders should watch for a pullback or a breakout
I'm sticking the weekly chart of the Natural Gas ETF UNG here until I spend more time looking at the daily chart at which point I will make a separate post for UNG. I have been looking for a possible wave (v) low develop for the past month or so and while it dropped under the targets I had listed, this does look like a possible low. Until over 21.65 and 22.58 there is a chance they retest the low though if they did, it should be brief.
One of the reasons that I have been skeptical about the gold rise is the correlation that it has had with the Japanese yen and I'm still bearish yen as the triangle is still valid here.