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 reached up into a zone today that could qualify for a shallow wave [II], but I'm not confident that wave [II] is complete.
Bonds bouncing in a wave (II). Initial resist at 173^18 and more at 176^18.
S&P 500 futures gave back their gains from yesterday overnight again but this time have recovered much of them before the NY session starts, a positive.
Bonds stayed to plan today falling away from resist at 174^02 and dropping lower to and a bit beyond 168^24.
I've switched my count in bonds over to that of a leading diagonal down complete and now in a wave (II) bounce.
Assuming there will be an attempt to make a new low today in SPX. Prefer it not be by much.
I'm certainly happy to see the drop in bonds away after testing resist at 181^31 but I'm not certain of the pattern.
I'd like to get a lower high set in bonds but too early to say that has taken place while 178^02 is holding as support.
Looking for bonds to form a lower high against 181^31 or 184^11.
Bonds are working on wave II for a lower high against 181^19 or 183^11.
S&P 500 hit the first circuit breaker this morning which is just above the first retrace of note in the futures of 2499.25.
Bonds are trying to push down from resist at 178^06.
I'm going to start with SPX today as it is the most on my mind having stared at it for the last few hours.
Bonds stalling under 184^06.
The S&P futures didn't like the 30 day travel European travel ban and promptly sold off last night from the late day session bounce.
Bonds slipped lower to test support at 177^19 and now bouncing a bit.
Bonds appear to be working on a wave 'II' bounce to form a lower high.
I favor the S&P forming a higher low this morning against 2768.50 or 2749.25 and push for at least 2861.25 if not 2821.50 today.
Bonds are trying to bounce from the 177^19 support.
The high in bonds might be set but expect some bounce from 180^00.
Expecting a somewhat dull day in the S&P 500 stuck between 2861.25 and 2831.75, maybe as low as 2788.00 but doubt they drop much.
Nice drop in bonds today but needs under 177^19 for confirmation of a reversal.
Bonds spiked higher this morning as you might expect with the circuit breakers being triggered in the equity indices but I think it likely that they drop under 185^24 and make an attempt to drop toward 180^00 and the gap fill just under.
I'm thinking the S&P 500 futures can use a down/up/down sequence before a serious attempt to rally again.
Bonds continue to grind up but the advance from February 6th looks extended.
S&P 500 futures fell lower overnight to the next major support for a possible 'C of (B)' at 2922.00.
I've took a tangent when starting on updating chart this evening by looking at the monthly bond chart.
Since the drop so far in bonds looks corrective, a new high is possible. Next spots to look for are 173^17 and 174^17.
S&P futures are down overnight from the high of yesterday.
Bonds beginning to consolidate under old resist of 172^10 suggesting a wave [IV] may be starting.
Weekly updates & other posts
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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.
Over the last few weeks, bonds have been forming candle wicks against resist as the two dominant cycles are cresting. I continue to think that bonds are close to reversing lower but need under 153^16 for first confirmation.
We are starting a holiday week with positive news over the weekend. Wednesday is a half day with Thursday closed for the US independence day. Friday morning is the NFP.
Cycles and an exhaustion study agree with my wave count that bonds are ready for a reversal. First evidence of a reversal is for bonds prices to drop under prior resist at 153^16.
Don't be fooled by the steep rise
But truncation also a possibility
Primary view is that bonds are late in a wave [II] bounce up from the 2018 low. The faster of the two weekly cycle suggest the top is nearby thought the longer cycle could help hold prices up into July or early August. Alternates, not listed on the chart, are that this is just (a) of [II] and there will be a future retest of this resist zone again after a decline in (b) of [II] and a bullish alternate that treats this a wave (a) of an ending diagonal [v]. All the counts can use at least a retrace lower from nearby.
right where they were supposed to
Cycles and the 9-5 study suggest that bonds are ripe for a reversal. At a lower time frame, it is possible the argue for one last small down and up move but very late in the game as price has reached the next set of resist at 155^04 to 155^21.
Bonds moved from the first target zone to the next last week. Now have an exhaustion signal when the dominant short term weekly cycle it cresting. The longer cycle still has some time left in it but the tailwind should be diminishing.
When I last wrote on UNG, I was looking for a possible truncated wave (v) low in conjunction with a projected cycle low for the year. Prices did in fact climb but was rejected by initial resist at 23.31. Despite that, the overall forecast for a possible low for the year in development is the same.
Leaving the current station soon
Before looking at the weekly bond chart, I want to draw your attention the this monthly chart of the 30 year yields. Yields finally dropped as expected to a new low on the year and at the top target of 27.61. The next target lower is 26.70 but no guarantee it will reach it. My hypothesis is that we are within a in a few month window that sets the low in yields, and high in bonds, for the year.
It's not too late to find the right trade
Bonds are close to retesting the March high and hence may slow or consolidate a bit but think the bias remains up into at least next month, maybe out to August.
Plan is for bonds to rise a bit more into July or August to finish wave [ii].
The weekly cycle in UNG has lengthened and is now forecasting a low over the next several weeks and rises toward the end of the year. The daily chart has a five wave count down from the wave iv bounce high in March. Prices rising over 23.31 is first confirmation that the low may be set though it is conceivable that the turn up is slow like in mid 2018.
Is your seat belt fastened?
Well, interesting start on the week as the trade news has dropped the S&P futures 50 points and bonds up a handle as each jumps in the direction according to forecast.
Second week of bonds holding support at 146^29 bodes well for a rise into July or August for wave (c) of [ii].
Is it time for the reversal?
Bonds trying to regain its footing against 146^29. I put more emphasis on the longer cycle on this chart which continues to climb into August over the shorter cycle which is topping out now.
My power went down for about an hour last week and prompted to pick a book off my bookshelf to read by the window till the power came back on. After the power came back up, I had asked in the chat room if there was any favorite stock that anyone wanted me to look at with through the lens of a technique that I just re-read about. AT&T (T) was suggested so below are my thoughts on (T) and some analysis using a Gann timing technique.
The bounce has been impressive but not surprising 🙂
Tricky position in bonds as we are approaching the next weekly cycle inflection. I prefer that to be used as either a wave iv or as 'c of (b)' both of which call for higher bond prices over the next several months.
Before looking at the weekly bond chart, how about a peek at the monthly 30 year yield chart. The dominant cycle on this chart suggests a low in yields for the year being set in the next few months. This is compatible with the bond forecast.
UNG has dropped from January 16th and from the next pop up in early March which is consistent with the forecast for lower from a wave iv bounce. Both weekly and daily cycles suggest an inflection point is near but price is not as deep as I'd like it. Since we now have prices back into the range UNG was in for much of 2018, I'm not confident in much lower prices but neither can I say lower is impossible. Disclosure, Natural Gas is my kryptonite, it is the market I have the most difficult time with, so take this accordingly, but I think we are in an area where a long trader can begin to accumulate.
Our main scenario is bearish, but there's an alternate too
Bonds appear ready to enter a couple weeks of correction before rising in one last impulse to finish (c) of [ii] up.