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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...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

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Events

UPCOMING (MAJOR) U.S. ECONOMIC VENTS...
* Fri. Oct. 4 @ 8:30 am ET ~ Employment Data
* Wed. Oct. 9 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Thurs. Oct. 10 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. Oct. 16 @ 8:30 am ET ~ Core Retail Sales & Retail Sales
* Wed. Oct. 16 @ 2:00 pm ET ~ Beige Book Report
* Wed. Oct. 30 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference

*** Click here for link to Economic Calendars for all upcoming events

NOTABLE POSTS WITH IMPORTANT UPDATES...

Tuesday, September 17, 2019

An Intraday Look At WTI Crude Oil Futures

Further to my post of September 14 regarding the attack on Saudi Arabia's oil refineries and possible effects on the price of WTI Crude Oil (CL) and Brent Crude Oil (LCO), I'd present this analysis of CL on a short-term intraday basis.

As you can see on the following 60 min chart of CL, price gapped up when it opened on Sunday and has been trading in a large volatile trading range since then. I had identified 60.00 as a major resistance level, and price has been, largely, trading above it since then, with a few dips below. It closed below that level on Tuesday.

The Balance of Power has shifted from buyers to sellers since the gap and is now at an extreme low level, from which, price has, typically, launched higher after previous drops during the past several months.


Shown on the next 60 min chart of CL are today's (Tuesday) and tomorrow's price Pivot Points and their respective intraday support and resistance levels.

Here are Wednesday's price levels:
  • R3 = 68.21
  • R2 = 64.08
  • R1 = 61.45
  • PP = 59.95
  • S1 = 57.32
  • S2 = 55.82
  • S3 = 51.69
Note that PP lines up with 60.00 major resistance, which traders will need to retake and hold if others are going to be convinced that sentiment has shifted back to the buyers.

I've also shown the monthly VWAP (volume weighted average price) on this chart (broken gold line). At the moment, it's in line with S1 and the 200 period MA (pink), so CL may briefly dip lower to that level before it, potentially, retests its upside breakout highs and beyond.

Also, the RSI indicator is presently oversold on this timeframe, hinting that a turnaround may be imminent.


The following daily WTIC:OVX ratio chart shows that price dropped on Tuesday to near-term support around 1.25. As well, a bearish moving average Death Cross has just reformed on this timeframe, suggesting a lower oil price may be imminent.

However, this may prove to be a "bear trap" for traders who position themselves on the short side of CL, in the near term.

To assist in gauging whether this is a trap, and potential price reversal points, keep an eye on:
  • the RSI on the daily timeframe for a flip back up towards 50.00
  • a reversal upwards and eventual bullish crossovers of the MACD and PMO indicators on the daily timeframe
  • a reversal of the bearish moving average Death Cross to a bullish Golden Cross on the daily timeframe
  • a reversal in the Balance of Power from sellers to buyers on the 60 min timeframe
  • price action around the Pivot Point levels, and, in particular, S1 and PP, together with VWAP and 200 MA, on the 60 min timeframe
  • the RSI on the 60 min timeframe for a flip back up towards 50.00


As an aside, Bloomberg is reporting the following...

Source: Bloomberg.com

In closing, I'd mention that it's not just about oil supply.

Now, it's, also, about the perception of increased vulnerability to more attacks, not only on oil facilities, but, also, other national and international security infrastructure, that will affect global markets and economies over the coming weeks and months, as well as any military escalations, as a result...and how longer-term players position themselves, as a result. Whether or not GOLD factors into their portfolios remains to be seen, about which, I've written in my post of September 17.

One thing is certain...heightened market volatility in both directions is here to stay for awhile.

India's Nifty 50 Index Under Bearish Death Cross

The news in this article from Bloomberg does not bode well for India's market.


The profit-taking mentioned in the article is depicted on the following monthly chart of the Nifty 50 Index (NSEI).

Price is sitting just below near-term support of 11000 and has fallen outside of an uptrending channel from the February 2016 lows.

The Momentum indicator (MOM) began diverging and making lower swing highs after October 2017, while the index was making higher swing highs...hinting at impending weakness. At the moment, MOM is sitting just above the zero level. A drop and hold below that would see price weaken further, perhaps down to its next major support level of 10000.


On a shorter timeframe,
  • a bearish moving average Death Cross has just formed on the daily chart of NSEI
  • price is trading below both the 50 and 200 MAs, and
  • Balance of Power is in the hands of the sellers and accelerating,
all of which are hinting of further near-term weakness, unless and until those conditions change.


1600 GOLD?

How about that...since I wrote my post of January 23, GOLD Futures (GC) finally hit just above its target price of 1550 on August 26...and it carried on to make a 2019 high of 1566.20 on September 4, for a gain of 21.58% from that date.


The moving average Golden Cross, that had just formed a couple of days prior to that, held, price retested the 200 MA (which is normal after these form), and the formation is still in play, as shown on the following daily chart of GC.


The following two monthly charts show that major resistance lies at 1600, while near-term support sits at 1450.

Although price looks overextended according to the RSI, MACD and STOCHS indicators, and it has run up against the top of its long-term rising channel, we may see momentum drive price higher, depending on what happens with the fallout from the Saudi Arabia oil refinery attack this past weekend, about which I've written here.

In the short term, keep an eye on the daily RSI, MACD and STOCHS for clues on price direction and strength. They're mixed at the moment, but, if the RSI breaks and holds back above 50.00 and if we see upside crossovers of the MACD and STOCHS that hold, then we should see higher prices.  At the moment, GC is sitting just above the 50 MA, which is providing near-term minor support.

1600 happens to be the Upper Value level of the Volume Profile shown along the right-hand side of the last chart. An escalation of Middle East military action could easily propel GOLD to that level, or much higher.



Monday, September 16, 2019

US Bond Bubble Or Equity Bubble?

Based on purely technical reasons, which I'll explain below, I'd hazard a guess that US bonds are not in a bubble. If anything, equities look more like their bubble is about to burst.

The price on the following monthly charts of US 2-yr, 5-yr, 10-yr, and 30-yr bonds is currently trading around their respective regression channel medians, after a lengthy move up over the past year off very oversold lows (around the channel -2 deviation level).

So, they're now priced around an average level, compared with historical data from 2008 (for 2 and 5-yr bonds), 2003 (for 10-yr bonds), and 2000 (for 30-yr bonds).


In contrast, the SPX is, once again, trading around the +3 deviation of a long-term uptrending regression channel taken from the 2009 lows, and is hovering just below the 3000 level, as shown on the following monthly chart.

Near-term major resistance sits at 3047.34, which is a 261.8% external Fibonacci Retracement level.


While bonds launched their latest climb from extreme channel lows, the SPX launched its climb over the past year off its channel median.

From that simple analysis, I'd say that we may see more weakness in the weeks ahead for the SPX than we'll see in bonds, although we may see volatility increase in all of them for some time due to the recent developments in Saudi Arabia and the price of oil over the weekend, about which I've written and added numerous updates as news emerges at this link.

As I mentioned in one of the updates in that post, keep an eye on the SPX:VIX ratio to gauge the level of volatility and direction of the SPX. Price on that ratio needs to hold above 200 to remain bullish...otherwise, a drop and hold below that level could send the SPX down to levels mentioned in my post of August 30. On the bottom section of the above SPX chart, the SPX:VIX ratio is shown in histogram format. It closed on Monday at 204.36.

As well the SPX will need to retake 3000 solidly if it's going to breakout and move higher into ever more extreme overbought territory (according to what the regression channel technicals are telling me).

Saturday, September 14, 2019

Light Crude Oil Breakout Imminent

* See UPDATES below...

Senator Lindsey Graham unleashed a series of tweets Saturday morning after learning of drone attacks on Saudi oil refineries.

I've yet to hear whether the Saudis will blame/have blamed Iran for the attacks and whether war will eventually be declared against them. It's been reported that, "Houthi rebels - who are backed by Iran in a yearslong Saudi-led war against them in Yemen - have reportedly claimed responsibility for the attacks and have vowed that further attacks could be expected in the future."

Source: foxnews.com

No doubt, this will affect oil prices when futures trading begins later on Sunday.

WTI Light Crude Oil futures closed on Friday at 54.84. As shown on the following monthly chart of CL, it's sitting just below the apex (at 56.00) of a large triangle and is about to breakout of this formation soon.

Saturday's news from Saudi Arabia may be the catalyst that catapults CL out of this triangle and to new highs for 2019 and beyond.

I've shown the ROC and ATR technical indicators in histogram format with an input value of one period. Keep an eye on the ROC to spike back above the zero level and climb higher to confirm higher prices. As well, watch for an expansion of the ATR on such a move, and, ultimately, for an exceptionally high exhaustion spike to signal either a pause in price or a trend reversal.


From the Volume Profile shown on the right-hand side of the following monthly chart of CL, major support sits at 50.00, which happens to be the Volume Profile's POC (point of control) on this timeframe.

Near-term resistance sits at 60.00. A breakout and hold above that could send price as high as 80.00, or even higher to 100.00, as others are now speculating.


On the bottom section of the following monthly chart of CL, the ratio of Oil to its Volatility Index is shown in histogram format.

Watch for it to break and hold above 2.00, and, subsequently, 3.00 on this ratio, as well as an upside crossover of the 5 and 8 MAs, to confirm the sustainability of such a price surge.


As a side note, whether a sharp rise in Oil also drags Canada's TSX Index higher, remains to be seen. Coincidentally, I wrote about such a scenario in my post late Friday night, based on different circumstances/influences.

Here's an excerpt from that article (entitled "Canada's TSX, Election and Trade Fever").


* UPDATES...

In the several hours that have passed since I posted the subject article, Secretary Pompeo has tweeted the following (he blames Iran, not Yemen, directly for the attack...reports speculate that the nature of the attack was too sophisticated to have been carried out by the Houthi rebels)...


This tweet from Reuters followed (but, exactly what "necessary measures to safeguard national assets, international energy security and ensure stability of world economy" would be taken by a Saudi-led, western-backed, Sunni Muslim military alliance, remains to be seen)...

Source: Reuters.com

And, now, these tweets ("expect chaos") surface from Zero Hedge on Sunday with a report from Goldman Sachs on oil...


Source: ZeroHedge.com

And, later Sunday afternoon, these clarifications are beginning to emerge...and it looks like uncertainty and volatility in the oil markets will remain elevated for, possibly, months...

 Source: ZeroHedge.com

Source: Reuters.com

Source: ZeroHedge.com

Click here for Bloomberg Tweet thread

The following screenshots (taken around 8:50 pm EDT on Sunday) of the daily charts of WTI Light Crude Oil (CL) and Brent Crude Oil (LCO) show that price gapped up significantly when these futures opened this afternoon...while S&P Futures gapped down and Gold Futures gapped up.

They're both hovering above prior-resistance-now-support of 60.00 for CL and 67.00 for LCO. The third chart is a monthly timeframe, which depicts LCO's new support level, as well as its next major resistance levels at 80.00 and 100.00.

We'll see whether those new support levels hold over the coming days.




Here we go...President Trump says U.S. is "locked and loaded"...


Source: ZeroHedge.com

The following is an informative interview on September 16 with General Jack Keane...(in my opinion, he should be appointed President Trump's next National Security Advisor...I've seen him interviewed many times on Fox News TV over the past couple of years, and he's a very smart, sharp as a tack, level-headed, highly-skilled and well-versed strategic military/intelligence tactician)...

Click here to listen to the interview

======================
In my opinion, the added risk of Middle East major military instability has, now, increased greatly...and could hang on for months...contributing to elevated oil volatility for some time.

And, what could be of more consequence, is the perception, now, that similar attacks like this CAN be done...again and again...especially if there are no consequences to this attack.
======================

So, what does this mean for the SPX?

To gauge the level of volatility and direction that the SPX may experience from Monday's open onward, keep an eye on the SPX:VIX ratio...daily chart below.

Price needs to hold above 200, then watch for a climb to, potentially, retest 250, or higher, to confirm higher prices for the SPX from Friday's close...and see how overbought the RSI, MACD and PMO are by then.

Otherwise, a drop and hold below 200, would see the SPX decline...perhaps to levels mentioned in my post of August 30.


As an aside, whether any of this affects the Fed in their decision-making on whether or not to cut interest rates at their upcoming meeting this Wednesday, and whether the SPX reacts, in kind, remains to be seen.

* UPDATE Sept. 18...Fed cut rates by 1/4%.



* UPDATE September 18...

"An Act of war"...

Source: ZeroHedge.com 

Attacks "unquestionably sponsored" by Iran...

Source: ZeroHedge.com 

"We have a major crisis on our hands"...

Click here to view video

Canada's TSX, Election and Trade Fever

From the information shown on the following two historical charts, it appears that Canada's consumers have done the heavy lifting over the past 10 years since the 2008/09 financial crisis, as foreign investment slowed and has since been quite volatile. It's likely to continue to slow due to the global economic slowdown currently underway and unresolved global trade wars.

Although the USMCA trilateral trade deal was signed by the leaders of the U.S., Mexico and Canada on November 30, 2018, it has still not been approved by the U.S. Congress. If it's not done before the Canadian Federal election on October 21, and if there's a change in government, will the new Prime Minister scrap the agreement and leave Congress holding the bag?


With Canadian household debt to disposable income near all-time highs, how much longer can Canadians afford to take on more debt? If this slows, will this change the dynamic of the USMCA and cause the Canadian government to re-think any of its negotiated terms?

It would seem that time is of the essence for Congress to approve the agreement before it's, potentially, too late.

Canada Households Credit Market Debt to Disposable Income
Source: tradingeconomics.com

Canada Foreign Direct Investment
Source: tradingeconomics.com

Compared with other G20 countries, Canadian household debt is at the higher end, as shown in the last table.

Source: tradingeconomics.com

Canada's TSX Index closed at an all-time high of 16,682.42 on Friday, after making an all-time intraday high of 16,756.11, and after launching off the median of a very long-term uptrending channel at the beginning of November, as shown on the following monthly chart.

It still has a couple of hundred points to go before it runs into its next major resistance level in the form of an external Fibonacci retracement level of 1.236% at 16,972.52.

To monitor such a possible move higher, I've shown the MOM and RSI technical indicators with their normal input values to gauge when they hit prior overbought levels. On the other hand, I've shown the ROC and ATR indicators in histogram format and with an input value of one period, which may spike exceptionally high to signal exhaustion and a potential trend change when/if MOM and RSI reach overbought conditions.

Whether all those line up to co-incide with price tagging the 1.236 external Fib level is anyone's guess...but ones that can be followed on this longer-term timeframe if price continues its breakout rally...especially ahead of Canada's October election...and as Canadians, perhaps, reflect on their debt burdens.


Friday, August 30, 2019

From This Week's "Smile File"...My First Computer

Enjoy your Labour Day weekend...


SPX: Warning Gaps?

As Friday's trading action is coming to a close in a couple of hours before the Labour Day weekend, an interesting observation to note is this daily chart of the SPX.

Since the beginning of August, gaps on the open in both directions have pretty much occurred on a daily basis (blue box). When the same thing happened in the last quarter of 2018 (blue box), we saw a rapid plunge in the space of a few days.

Both pink boxes shows that a similar setup may be forming. The question is, will it retest the December 2018 lows anytime soon?


If I had 2 crystal balls, I'd give you a second opinion...😊


Monday, August 26, 2019

Which World Markets Most Need A Trade Deal?

This is a very simplistic look at world markets and current world trade wars...sometimes the K.I.S.S. principle can be useful.

Take a look at the thumbnail charts (monthly timeframe) of the following major world indices:
  • SPX - USA
  • FTSE 100 - UK
  • DAX - Germany
  • CAC - France
  • FTSE MIB - Italy
  • IBEX - Spain
  • SSEC - China
  • NIKK - Japan

It's pretty easy to see, at a glance, whose equity markets have led and whose have lagged, over the past couple of decades (since around 2000).

Which one do you think could best weather prolonged trade wars, especially if they escalate, as well as a possible substantial loss of market capital from their current levels? Which market has most benefited from its central bank's monetary and political fiscal stimulus policies since the 2008/09 financial crisis? 

The answer to those simple questions will tell you who most needs a trade deal in the near term...and I don't think it's the USA. My two cents' worth, from a chartist's perspective, says it's in the strongest position in this regard.


Saturday, August 24, 2019

Volatility Churns In US Markets

* See UPDATE below...

As I mentioned in my post of August 5, volatility ramped up on July 26 and it continues to churn in US markets, as evidenced on the following daily chart of the SPX, as well as the monthly chart of the SPX:VIX ratio.

Near-term resistance and support levels are 2950 and 2800, respectively, on the SPX.

Major resistance and support levels on the SPX:VIX ratio are 200 and 100, respectively.

Until we see a clear breakout and hold above or below these levels, both price and volatility will continue to churn in a large sideways trendless direction.



Furthermore, as President Trump continues to pump out unpredictable tweets like the ones below that he let fly on Friday, volatility will remain elevated in both directions.




And, this about sums up things with respect to US trade negotiations with China...


* UPDATE September 13...