Trading Week 27/0513

Saturday 1stJune 6.50 am
I see we’re still in a bit of no man’s land. The USDX is still just under the 84 and the EURX is sitting on the 108.5. I travel home today and will update more later. Also, there is red flag Chinese data out in a few hours and this could impact sentiment heading into next week.
USDX:

EURX:

A/U: It looks like this will close the week out below the 0.96. That is significant.

E/U: this has closed the week just under the safety of the 1.3 level:

S&P500 30 min chart: there was a late sell off. I’m wondering if this might be due to end of month stuff though. I would have expected to see this translate into bigger ‘risk off’ moves with the currencies if there was any real market sentiment concern. The A/U didn’t budge much though which makes me a bit suspicious. Also, the E/U rallied a bit whilst stocks sold off so it seems there wasn’t too much worry.

S&P500 daily:The daily chart shows that there has now been a 7/21 EMA cross. There have been a few of these already (see arrows) that have not resulted in huge selling but I will keep on the lookout for further signals of any more serious deterioration:

Gold: reversed it earlier gains and is back where it has been for much of the last 2 weeks:

Friday 31 st (9.30 pm) Adelaide
Hmmm. The EURX has pulled back and is now below the 108.5 again. It seems there has been renewed talk about negative interest rates and this was on the back of some weaker than expected European data. The USDX is showing some strength but still below the 84:

That EURX and USDX index alignment may now not evolve. I’ll keep watching.

Friday 31 st (4.25 pm) Adelaide
I’m just having a quick look at some stock charts. I’ve loaded some in my Stocks:May page. I do want to draw your attention to AAPL though. It has now broken up through its daily Ichimoku Cloud. I think that this is worth watching!


Friday 31 st (4pm) Adelaide
I’m back at the hotel for just a little while. I am thinking that if any more USD weakness is going to follow through then we might see the USDX daily Ichimoku Cloud compromised during the next US trading session. If that does evolve, and it’s a big IF, then that would set the Ichimoku charts into alignment heading into next week with Monday being the first day of the June trading month. You might recall how the first trading day of the month is, more often than not, bullish for risk appetite (stocks etc). This norm would dovetail in with any further USD weakness.

The Ichimoku Index chart alignment may not follow through though. We have been close before over recent months only to see the mood reverse. I am a trend follower so I will wait to see if this trend does evolve and then I’ll tag along.

USDX daily Ichimoku Cloud chart: waiting to see if any further USD weakness emerges and if this can push price below the daily Cloud.

I’m back at the hospital later today and then I travel back to Sydney tomorrow.

Friday 31 st 10.50 am Adelaide
Start to get excited guys…..we are moving towards a situation where the EURX and USDX indices may soon be aligned on both the 4hr and daily time frame.  This alignment, if it evolves, would be towards ‘risk on’. The alignment has not kicked in just yet and may still well fail but, if it does, then we could be in for some extended trending period. This is after 3 months of very choppy action. This alignment would favour short USD, long risk (eg stocks, Euro, AUD, NZD etc).

EURX: This has made a bullish triangle break on the 4hr chart. It is also trading above the Ichimoku Cloud on both the 4hr and daily time frame:

USDX: this has made the ‘bearish ascending broadening wedge’ break now. Price is also falling down to be just above the daily Ichimoku Cloud. The point to note here now is how the Cloud below price is very thin and this means that it may not offer too much support, should price get down there:

U/J: looking heavy:


Gold: I see a signal kicked in on the 4hr Gold chart


E/U: looking bullish

A/U: waiting

G/U looking bullish too

Friday 31 st May (8.10 am) Adelaide

I’m not able to update at the moment as I’m at the hospital.

Thursday 30th (3.30 pm)
USDX: maybe this was a bearish ‘ascending broadening wedge’ after all and not a ‘Bull Flag’!

Gold: USD weakness might help Gold. It looks to be starting to edge upwards:

Thursday 30th (3.15 pm)
E/J: in a new triangle

U/J: ditto

I’m heading off to catch a plane shortly. I’ll update again when I can.

Thursday 30th (3 pm)
G/U: is looking bullish. Has taken too long to form a proper TS 4hr signal:


E/A: has closed for -50.

Thursday 30th (2.10 pm)
Most Asian markets are down but I note that the risk currencies are all, for the time being at least, bouncing off lows.
A/U bouncing off the 0.96

E/U bouncing off the 1.28

G/U bouncing off the 1.5

Kiwi hovering above the 0.80.

These levels may not hold but will be key to watch if the broader stock market does indeed continue to sell off.
Thursday 30th (11.40 am)
S&P500: There are still two more trading days left in this month of May. The current monthly chart of the S&P500 shows a clear breakout to new highs:

The question on everyone’s lips is:

  • Is this a new high that is forming a new floor of 1,600 for stocks OR
  • Is this a new high from which the markets will come crashing down? 

There is much fundamental commentary around about these two issues that is widely available. I’m not skilled in that area so not qualified to comment there at all. I’m simply looking at the chart from a purely technical view point. I keep saying, this market top looks a lot different to the those from back in 2000 and 2007. I’m not seeing the divergence now that was evident back then. This is no guarantee of any future direction at all but, rather, simply something I’ve noted. Even if 1,600 is to be become the new floor for the S&P500 I would still expect this level to be re-tested and, then, for possibly quite a lot of choppy action either side of this level for some time. This is what we’ve seen when currencies, and their indices, have been confronted with major S/R levels so I’d expect to see the same here. I do note that the current monthly candle is looking rather bullish BUT a severe pull back during the final trading session of the month could render this candle as a ‘shooting star’ or similar. These are bearish formations and the formation of a bearish candle for May would have me much more cautious. This next two trading sessions will be quite interesting!

Thursday 30th (11.30 am)
Mixed AUD data just now leaves the A/U a little undecided. I’d be loathe to SHORT the A/U until there is a daily candle close below 0.96. Better still, a weekly candle close!:

Thursday 30th (6 am)
S&P500: Today’s candle ended up as a ‘bearish engulfing’ candle. This follows on from the reversal style ‘shooting star’ from yesterday. Two bearish candles in a row now. Not all bearish engulfing daily candle have resulted in significant bearish follow through though so caution is still needed.


Thursday 30th (5.30 am)
The indices continue to chop around with neither prepared to make a clean break…up or down. The USDX is still tucked below the 84 and the EURX below the 108.5:
USDX

EURX

Stocks: have been choppy

S&P500: is this yet another ‘reversal style’ candle looming? I’ll need to see how it closes.

E/A: the only open signal now seems to have reversed for loss:

E/U: looking bullish?

A/U: hovering above the 0.96.  Data later this morning might move this pair:

G/U: looking a bit bullish

Kiwi: ditto here

U/J: looking heavy

Silver and Gold: with the USD dragging these two might just be starting to edge upwards…ever so slightly and slowly:
Silver:

Gold:

The next trend could still move either way at this point but, if I had to guess, I’d be thinking the overall mood seems to be toward a weak USD. I will continue to wait until there is greater confluence of signals across the pairs and, also, across stocks.
I have to travel to Adelaide later today to assist a family member who is having surgery. I won’t be back until Saturday and will update if and when I can.

Wednesday 29th (9.30 pm)
EURX: I’m watching to see if, just maybe, that bullish inverse H&S pattern on the weekly chart might be starting to evolve!
EURX weekly

EURX daily

EURX 4hr


USDX: maybe the ‘bearish ascending broadening wedge’ will trump the ‘bull flag’???

Wednesday 29th (9 pm)
There is sudden USD weakness. The USDX has dropped below the 84 level and the EURX has rallied to be above the 108.5:

The E/U has rallied:

The A/U has bounced back above the 0.96

The G/U has bounced off the 1.5

I don’t know what caused this extreme bounce just now. This return to ‘risk on’ may not last and that is why I’m waiting for the daily candle close on the A/U.

Wednesday 29th (7.30 pm)
The indices and pairs have been quite choppy. The USDX has fallen back to the 84 level and the EURX is still lurking just under the 108.5 level:
USDX:

EURX:

E/J closed now for -50

A/J closed now for -90

U/J closed also after giving 30 pips:

G/U: has bounced off the 1.5 level after giving 60 pips:

A/U: I’m waiting for a daily candle close here to see if it closes below the 0.96 level.

E/A: has given a signal too:

Stocks: We’ve had a few pin bar reversal candles over the last few days. There was another one last night. This is a ‘shooting star’ candle and, although bullish in colour, these often suggest some downside is in store. Note that a pull back here would probably drag the A/U down with it:

Wednesday 29th (11 am)
A/U: This has broken below the 0.96 level and I have just received a SELL signal on my 4hr chart:

Wednesday 29th (6.40 am)

Some positive US data has boosted stocks but also seems to have boosted the USD. The EURX has pulled back to under the 108.5 level but the USD has shot up over the 84 level:
EURX:

USDX:

S&P500: closed higher

The current TS signals are a bit choppy;
E/J down

A/J down

G/U up

U/J up

The E/U is not enjoying the risk appetite shown with US stocks. No signal here yet:

A/U: this is pushing down towards key 0.96 support again. No signal here yet:


Kiwi: has traded pretty flat:

Tuesday 28th May (8.30 pm)

Aussie Stocks: I have updated my Aussie Stocks page. Aussie stocks have pulled back a bit but most are still trading above major support trend lines. I wouldn’t be selling off here just yet. Many stocks are down near support but, I believe, would need to fall a bit further to confirm any new down trend.


Tuesday 28th May (7 pm)

Yen: The yen pairs have given LONG signals: A/J, E/J and U/J. This adds to that of the G/U.

Tuesday 28th May (6.30 pm)

S&P500: That pin bar reversal candle from Friday might have been ‘on the money’:

Tuesday 28th May (4.40pm)

EURX: has punched up through the 108.5 again. The more times it does this then the more likely I think it will be to hold this position.
S&P500: I have a signal to LONG on the S&P500 at this early European session stage. This dovetails in with the irsk on I’m seeing with the EURX. I’d want to see how it goes into the US open though first. I’ll be asleep then!

Tuesday 28th May (2.25 pm)

It seems to be a battle of the indices. the USDX is struggling at the 84 level. The EURX is taking on the 108.5 level:

No news, or light news, days often tend to drift towards ‘risk on’. We shall see heh?

Tuesday 28th May (11.40 am)

USDX: we’re seeing a bit if USD strength here during the Asian session:
Cable: I have had a new signal to SHORT the G/U. I’d prefer to wait and see if the USD can get over the 84 level though first. Also, we’re only 70 pips above the S/R level of 1.5:

Tuesday 28th May (7.15 am)

Levels are all pretty much the same as yesterday:
USDX: still in flag

EURX: still in trading range

E/U: still under the 1.3

A/U: still just above 0.96

Cable: still above the 1.5

Kiwi: still above the 0.80

There isn’t much news today either.

Monday 27th May (5.10 pm)

It’s fairly quiet as expected given the USA and UK bank Holiday. The USDX is still below the key 84 level and the EURX below the key 108.5 level:
USDX:

EURX:

E/U: still under the 1.3

A/U: still hovering above the 0.96

Kiwi: still just above the 0.80

Cable: still above the 1.5
Stocks: I have updated my Stocks:May page with a few stocks that have given off some bearish signals. I’m waiting to see if the market sentiment shifts to ‘risk off’ at all and then to see if these stocks close below key levels. If so, I’d be looking to buy Put options!