Market Update – May 1

S&P 500 FUTURES (ES) DAILY

ES reversed back below 2939.75 so I’m treating today’s high as a risk point for shorts.  Proposed resistance is 2923/32, which were intraday supports on Tuesday.  A proposed downside swing target is 2670ish.  This is the median line of the bearish fork from the October 2018 high (was support on 3/10 before the 3/12 breakdown).  VWAP from the low is currently 2672.50.  This figure will rise slightly each day.

4/29 – Wow.  I did NOT imagine that the S&P would be back at these levels.  As I type in after hours trading, ES is taking out the 2/28 close.  Volume on 2/28 was the highest since August 2011 (U.S. debt downgrade).  High volume days are important because they represent a ‘vested interest’ at that specific area.  For this reason, the close of high volume days are good candidates for support/resistance.  That level is 2939.75.  A drop back below this price would at least offer a risk point to trade against.  Other than that, I’ll note the 200 day average at 2997 as a level worth monitoring.  Anecdotally, a friend texted me today to tell me that she has signed up for Robinhood (a stock trading/investing app).  This person has never once asked about the market and I don’t think its a coincidence that the text was sent after a nearly 800 handle rally.

EURUSD 4 HOUR

We nailed support on EURUSD and focus is towards the noted levels (1.1043 and 1.1239).  Very short term, price could pull back from 1.0990 and 1.0900 is now proposed support.  Tactically, I’d like buying into 1.0900.  Risk for longs is today’s low at 1.0833.

4/29 – EURUSD is constructive towards the mentioned 1.1043 initially but if this is a 3rd or C wave then 1.1239 is in play at minimum.  Levels to pay attention to into and during ECB (always beware the spikes) are 1.0915 and 1.0840.  I want to buy into 1.0840.

USDJPY HOURLY

USDJPY spiked into the top of the noted zone for resistance (high today was 107.50).  The high is ticks below the short term trendline (line off of the 4/6 and 4/23 highs).  Today’s spike serves to clear the market of weak shorts that chased the breakdown into month end and I consider it a trap.  Initial focus on 105.05/20 (61.8% retrace and 3/16 low).

4/29 – USDJPY is breaking down.  The most bearish interpretation treats the drop from the 4/23 high at 108.05 as a ‘3rd of a 3rd’ wave.  If just something corrective, then 105.05/20 is ideal support.  Trading focus though is on shorting as close to the red trendline as possible.  The broad resistance zone is 106.92-107.40.

USDCAD 4 HOUR

USDCAD reversed higher after dipping under 1.3855…beauty!  Near term focus is on the mentioned 1.4010.  Let’s see what happens there but the upper parallel and 200 period average on the 4 hour chart could be in play near 1.4120.  Bottom line, I’m bullish against today’s low.  Proposed support is now 1.3900.

4/29 – Lower lows and lower highs = downtrend.  If a channel is drawn from the March high, then the center line comes in at the 4/13 low of 1.3855.  Watch for a bounce there.  If it does bounce, then ideal resistance is 1.4010.  Downside targets over the next week are 1.3607 (61.8% retrace of rally from 12/31) and 1.3465 (trendline confluence and 2/28 high).

NZDUSD DAILY

NZDUSD reversed from 2020 trendline resistance today.  I’m not sure what’s going on from a pattern perspective but levels are clean.  Former lows at .6190-.6200 are likely resistance if reached and .6070 is a level to know for a short term bounce (see hourly chart below).  For now, just focus on the levels.

NZDUSD HOURLY

EURCAD HOURLY

Bullish EURUSD and USDCAD so bullish EURCAD would make sense.  When I look at the chart itself, it does make sense!  A descending wedge has formed from the March high.  Price is testing the upper boundary of that wedge now.  If price breaks above, then I’ll look to buy a test of the top side of the wedge line.  As a general rule, a trading target after a wedge breakout is the origin of the wedge.  In this case, that’s the March high at 1.5991.