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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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Tuesday, June 30, 2015

SPX Candle Review of the First Half of 2015

Q2 of 2015 closed today (Tuesday, June 30th). The following describes candle action, to date, in four timeframes -- namely, Yearly, Quarterly, Monthly, and Weekly timeframes.

Each candle shown on the following chart of the SPX represents One Year.

The first half of this year is depicted by a "doji," as of the close on June 30th -- spelling "indecision" by this equity market. So far, the close is a mere 4.21 points higher than its open on January 2nd...not much of a gain in six months...no surprise, since price has been held back by the 161.8% External Fibonacci Retracement level (taken from the last major swing high in 2007 to the 2009 low), which is a typical major Fibonacci profit-taking level.


Each candle on this next chart of the SPX represents One Quarter of One Year.

Q1 of this year is depicted by a "spinning top" -- spelling "indecision" by this equity market. Q2 of this year is depicted by a "shooting star" with a slightly lower close than Q1 -- spelling a rejection of higher prices and a "bearish tilt" to this market.


FURTHER OBSERVATIONS...

Momentum has declined since 2014 on both charts -- confirming the lack of bullish confidence and commitment in this index. Candle action on both charts shows that major profit-taking has occurred in a considerable number of stocks in this index, so far, this year. In order to confirm that bears have taken firm control of this index going into Q4 of this year, we'll need to see a lower close on the Q3 candle (which begins tomorrow) on September 30th.

DRILLING DOWN...

However, looking at two shorter time frames:
  • because of June's "bearish engulfing" candle, we'll need to see a lower close for the upcoming July candle on the following Monthly chart to signal further medium-term bear strength going into August, and
  • because of last week's "bear harami" candle and a lower price below that close, so far, this week, we'll need to see a lower close by the end of this week on the following Weekly chart to confirm further short-term bear strength going into next week.

So, I'd watch for lower lows on this week's candle with a lower close on Friday, and, then, a lower low on July's candle with a lower close on July 31st -- also, a drop and hold of the Momentum indicator below the zero level on both charts (it has already dropped below zero on the Weekly timeframe) -- to warn of bearish control of this index going into August.



Monday, June 29, 2015

Bull/Bear Struggle for Control of EUR/USD

The following Monthly chart of EUR/USD Forex pair shows that price has been bouncing (generally) between 1.15 (dotted yellow horizontal line) and 1.08 (solid yellow horizontal line) since February of this year.

At the moment, 1.15 is defined by a confluence of a Fibonacci fanline and a falling trendline...1.08 sits around the lower one-third level of the large price range between the 2000 lows and the 2008 highs.

Bulls will need to reclaim, firstly, the 1.15 level, then 1.19 and 1.21...Bears will need to drop price below 1.08 to, potentially, 1.02 or lower. However, price support is much lighter at 1.02, as shown on the TPO Profile along the right edge of the chart, so price could slice right through that level before finding stability at a much lower level -- the lower "value" level (blue horizontal line) of the TPO Profile shows that near-term price support sits at 1.10...an important Line-in-the-Sand level for Bulls to hold and Bears to break.


Tuesday, June 23, 2015

Re-test of 98 in Store for U.S. Dollar?

The U.S. Dollar is back above the major support level of 95 after a brief break below, as shown on the Daily chart (cash index) below. As I mentioned here and here recently, I believe a large move is coming, one way or the other, in currencies. The RSI indicator is back above the 50 level, hinting that bulls are back in charge of $USD.

A re-test of 98 is not out of the realm of possibilities next and will be the first major resistance level that will need to be overcome to convince traders to pile in on this trade...assuming price breaks back (and holds) above the declining 50 MA around 96 immediately above today's (Tuesday's) close...coincidentally, there is a confluence of major resistance at the 96 level -- formed by a Fibonacci fanline and mid-Bollinger Band intersect -- as shown on the next Weekly chart of the U.S. $ Futures Index. Watch for the RSI to stay above the 50 level  (on the cash index) to confirm such a rally...as well, we'll need to see a higher high on the RSI at the 98  price level as a sign of bull conviction for any sustainable move higher.



Monday, June 22, 2015

Fibonacci Resistance Levels on S&P 500 E-mini Futures Index

Depicted on the Weekly chart below of the S&P 500 E-mini Futures Index (ES), are two External Fibonacci Retracements, a Fibonacci Extension, and a channel.

There are two upcoming levels of confluence representing major resistance:
  • the first is between 2139 and 2155 (which could be hit any day now)
  • the second is between 2213 and 2216 (which could be hit around July 20th if this extreme bull run continues in an aggressive, sustained momentum)

I'd watch for any aggressive drop below 2070 to signal a possible re-test of the bottom of the channel around the 1980 level, or even lower (I'd watch for general signs of weakness in the Dow Jones Composite Index -- as noted in my post of June 20th -- as confirmation)...otherwise, if price holds above 2070, we could very well see the second target resistance level hit by July 20th.


Saturday, June 20, 2015

Watch Out for the "Big Freeze" (Bull Squeeze)

From the Monthly chart of the Dow Jones Composite Index, I'm seeing a "dinosaur" formation from 1999 to the present (first the tail, then legs, neck, and finally the head and nose -- where price is now). We all know that dinosaurs became extinct...my gut tells me that this present dinosaur bull run is not sustainable -- and likely due for a very big fall -- possibly in a 2-tier drop (big drop, small bounce, and big drop).

There are three reasons why major support lies between 4733 and 4900 on this index, which, technically, could be hit by December 2015...there is a tri-Fibonacci confluence at that spot (denoted by the red rectangle).

Watch out for the "big freeze" (bull squeeze) by Christmas.


Friday, June 19, 2015

Greece: At The "Point of No Return"

There's nothing but thin air below price on the Greek Stock Index, as shown on the Daily chart below...the RSI indicator is hanging on by its fingernails and has yet to make a lower low even though price has...with so many rumours flying about these days on their debt repayment situation, it's anybody's guess as to who (if anyone) will keep it afloat (above the current "point of no return").


Sunday, June 14, 2015

One May Trigger the Other: DJUSFB and SPX

The U.S. Food & Beverage Index (DJUSFB) pretty much trades "lock-step" with the S&P 500 Index (SPX), as shown on the Daily chart below...any significant and solid breakout of this year's trading in one of them should trigger a similar move in the other.


FYI, the DJUSFB is up 158% since its March 2009 lows, as shown on the percentage-gained graph below.


Tuesday, June 09, 2015

Big Move in Store for U.S. $

The "hammer" on June 4th did not confirm on the following Daily chart of USD...imho, a solid break either side of 98 or 95 may forecast what's to come for the rest of the year. My gut tells me that a big move is coming soon in currencies, one way or another...


Monday, June 08, 2015

The Fireworks Have Begun

Further to my post of May 27th, the fireworks have begun...see the updated Daily chart below of the World Market Index, as of today's close.

1900 was major support, which has been broken...watch for a potential drop to 1600 or lower, as mentioned in my UPDATE of May 22nd (noted in my original post of March 5th).

However, watch out for a possible bear trap...anywhere between 1850 and 1875...the RSI should stay below the 50 level to confirm that bears are in control.


I will say that it is interesting that this index has fallen, in spite of the dizzying heights reached by China's Shanghai Index and Japan's Nikkei Index...note the negative-diverging indicators on the following 2 Daily charts. If we see blow-off tops occur in these, we just may, in fact, see the World Market Index drop to 1600...rather quickly.



We may see an early indication of such bearish action play out in the currency markets...the U.S. $ is sitting just above major support at 95.00, as shown on the last Daily chart...watch for the RSI to move back above the 50 level as an indication that bulls are back in this trade.