Market Update – April 21

S&P 500 FUTURES (ES) 4 HOUR

Remember the 4 hour volume reversal on 4/9?  ES failed to follow through on that reversal but price is back to that level.  2923/48 wasn’t reached but the rally from the March low consist of 2 equal waves…exactly.  So, there is reason to ‘think’ that a countertrend rally is complete.  Pay attention to 2770, which is the trendline from the low and VWAP from the February high.  A break below there would also leave the rally from March as a bearish wedge, which would suggest an eventual re-test of the low.  The next immediate spot to watch then would be 2600/30 (VWAP from the low and recent resistance and support).

4/14 – 2923/48 lines up as a significant level in ES.  This is the 61.8% retrace of the decline and 2020 VWAP.  The short term bullish channel is a Schiff fork (not as steep as a regular channel) and the upper parallel intersects this zone on Wednesday.  The big test on the downside is now 2630.  A break below there would represent a near term behavior change from bullish to bullish.

NASDAQ FUTURES (NQ) 4 HOUR

NQ traded into 8914 and has responded.  The uptrend from the low is intact as long as price is within the channel.  The lower channel line then is the key spot to know for a change in behavior in the 8320/67 zone (also VWAP from the February high, 3/10 high, and longer term parallels).

4/14 – I been proven wrong on returning to a bearish stance on U.S. indices, and notably NQ, into the well-defined levels last week.  Wrong or early, but early in trading is still wrong.  NQ has gone through almost everything, including 2020 VWAP (barely).  The level that I’m looking at now for a possible turn is the 1/27 low at 8914.  This level was resistance in early March and intersects the short term upper channel line on Wednesday.  8300 is proposed support now.

COPPER HOURLY

Copper has broken trendline support.  The underside of that line is now proposed resistance near 2.3355.  Immediate downside focus is 2.2365, which was resistance in March and early April.  If copper is basing for a bigger move higher, then that level needs to hold.

4/13 – Copper remains constructive but price has reached the 200 period average on the 4 hour chart so respect potential for a pause.  In order to remain constructive on copper for a run at 2.48-2.51 we need to see the lower parallel of the Schiff fork hold.  That is about 2.27 now.

GBPUSD 4 HOUR

GBPUSD is testing the parallel that extends off of the wave 1 high.  This line was precise support for the wave 4 low.  A break below here would present a bearish opportunity for a run at 1.2164 (wave 4 low and 38.2% retrace of the 5 wave advance).

4/15 – Is that it for GBPUSD?  The rally is in 5 waves but I was thinking it would try for the noted higher levels.  Given the USDOLLAR comments, I do lean towards the idea that 5 waves up are complete in GBPUSD and that a bigger pullback is underway.  Also, note the 3 circled areas on the chart.  These 3 points are used to draw a pitchfork and today’s high is right on the median line of that fork (also the 200 day average).  Watch for resistance from a high volume level at 1.2593.

AUDUSD 4 HOUR

AUDUSD traded into .6398 and reversed.  My near term view is that a lower high is in place.  Proposed resistance for short entry is the week open at .6364.  The first level to pay attention to on the downside is the 3/31 high at .6214, which is also near the 20 day average.  I’m not willing to look much further out than that right now but the next level to be aware of on the downside is .6100ish (VWAP off of the low and 38.2% retrace…see futures chart below).  Also, seasonal tendencies are bearish through May.

4/16 – AUDUSD did nothing today am my view remains the same.  I like the short side against this week’s high.  The only change is that resistance may be more like .6390, which is the underside of the line off of the March and April lows (red line) and center line of the Schiff fork.

AUSTRALIAN DOLLAR FUTURES 4 HOUR

AUDUSD WEEKLY SEASONALITY

USDCAD 4 HOUR

A higher low may be in for USDCAD at 1.4005.  The line that crosses the 3/31, 4/2, and 4/6 highs has held as support.  Also, VWAP from the April high in CAD futures (which would be support in USDCAD) has held as resistance (see futures chart below).  The rally from the April low in USDCAD would consist of 2 equal legs at 1.4324, just below the cited 1.4336/57 zone.  Proposed support for entry is a high volume level at 1.4072.  This was also resistance on 4/8 and 4/9.

4/19 – I like the USDCAD long setup with entry on the top side of the broken trendline.  That line intersects 1.3940, which is where the drop from the 4/16 high would consist of 2 legs.  Upside focus remains 1.4336/57 (weekly reversal resistance and 61.8% retrace).

CANADIAN DOLLAR FUTURES HOURLY