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 on track moving up out of the consolidation.
Bonds also near a junction.
S&P 500 futures are starting off lower this morning.
Bonds look like they need to dip a little lower to test 175^30 before the next try to push past 178^03.
It looks like bonds are making a more complex form for a wave (II).
Quite the roller coaster in the S&P 500 futures after the New York close yesterday as a trade headline took the market down pretty hard but then reversed quickly on denials of the news which caused a quick recovery.
Bonds retreated a bit after testing resist at 178^03 today.
Bonds are on track lifting from the test of 176^08.
S&P 500 futures have recovered an initial drop Sunday evening against support at 3025.25 and made it close to one of the resistance targets for the day at 3101.00 early this morning.
Bonds tested support around 176^08 this morning.
S&P 500 futures are rising on positive trade news.
Bonds are testing a resistance value this morning at 177^12 that may stall further advance for a bit today.
S&P 500 futures continued lower late in the evening yesterday but bounced up into the very early morning today.
Not much new to say about bonds as they retested support today and lifted to retest the daily moving averages.
Bonds trying to lift from a higher low against 175^19.
The overnight action in S&P 500 futures was much the same as that of yesterday afternoon, choppy with a mild upward bias.
Bonds slipped a bit under the .382 retrace at 175^20 today to test an intraday support and later recovered it by the end of the day.
Bonds have poked under the .382 retrace of 175^19 this morning but I think it can be recovered shortly.
S&P 500 futures consolidated overnight and pressed higher in another leg after the retail sales number and positive news on a Covid-19 treatment early this morning.
Bonds retested resist at 178^03 today prior to retracing a bit.
I am posting an updated chart to correct a typo on the morning chart.
Bonds retesting resist this morning at 178^16 this morning.
S&P 500 futures dropped lower on Sunday night and early Monday morning to test the next support levels at 2959.00 and 2932.25.
Bonds are continuing their retrace from testing resist yesterday at 178^11.
The S&P 500 futures have been climbing steadily overnight and are nearing resist at 3071.25.
Bonds remain on track rising yet again, this time to punch through the daily moving averages.
Bonds doing great but should begin to slow the advance soon.
S&P 500 futures took it on the chin last night so we will start with a gap down in the day session.
Bonds continue to behave well advancing again today.
Bonds on plan, testing a near term target at 175^05 this morning.
Weekly updates & other posts
(Public posts are included on this page too.)
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.
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