Market Update – June 12

S&P 500 FUTURES (ES) 4 HOUR

Finally something else besides ‘melt-up’.  Index action in 2020 is basically straight up or straight down.  Once the market picks a direction, it goes quickly in that direction without much of a counter reaction.  In ES, pay attention to 2976 for a bounce.  If it does bounce, then note 3065 for resistance.  IF a larger reaction materializes (which would be a change) then 3137 should provide resistance.

SPY DAILY

In SPY, 294.88 is a possible bounce level but the biggest zone to pay attention to (decision zone perhaps) is the low 280s.  This is the 38.2% retrace of the rally, 2020 VWAP, VWAP from the March low, and simply a horizontal level that’s been important since August.

USO DAILY

Oil is correcting the 5 wave rally and focus for support is still 22.50-23.50 (the top of this zone is VWAP from the low).  Correlations change so don’t assume that if oil finds support and a higher low then equities have to do the same.  They could continue to move together or diverge.  I don’t know.  Nobody knows. Analyze each market separately.

6/3 – The crude rally from the 4/28 low counts in 5 waves.  The USO chart (see below) is actually cleaner .in my view.  The implication is for a corrective pullback.  22.50 is ideal support in USO.  This is VWAP off of the low and the 4/21 high volume day (highest volume day ever).  In futures, pay attention to the 2016 low at 26.05 for support.

EURUSD 4 HOUR

EURUSD popped to a new high and reversed.  My view is that a corrective decline is underway.  The median line is possible support along with the late March high at 1.1148.  The high volume level at 1.1344 remains proposed resistance.

6/9 – Not much to add regarding EURUSD.  Price dropped to noted support (1.1239) and then bounced into the high volume level.  Non-confirmation between EURUSD (never took out Friday’s high) and DXY (took out Friday’s low today) is a negative.  Finally, the rally from 1.0775 can be counted in 5 waves (truncated 5th wave).  The implication is that at least a 3 wave pullback unfolds.

BRITISH POUND FUTURES 4 HOUR

GBPUSD is into proposed support at 1.2550/80 but respect potential for a deeper setback given the failed break above the April high.  The zone that may be 1.2365-1.2400 or so.  This is a short term trendline, 61.8% of the rally from 5/17, and VWAPS from the March and May lows.  Resistance should be 1.2642/72.

6/10 – GBPUSD traded 1.2813 today before fading.  High is just under the median line of the fork from the September low.  This line was resistance in April.  If GBPUSD inches higher, then pay attention to 1.2849 (February 20th low).  I remain of the mind that price is due to pull back and that the blue parallels will be in line for support near 1.2550/80.

AUDUSD HOURLY

AUDUSD is into a noted bounce level at .6855.  If price bounces then resistance should be .6933 (high volume level and underside of neckline).  Downside focus remains the lower parallel.

6/10 – AUDUSD spiked to a new high again before fading late.  Nothing has changed from yesterday’s view that price is going to pull back and that focus for supports will be .6855 and .6685.  Also, price has been testing the year open for the last 5 days.  One of my favorite (and simple) setups is to simply trade reactions off of the year open.  Examples are highlighted below (wouldn’t have worked in 2016).  If AUDUSD keeps grinding higher then be aware of .7132/48, which is the 61.8% retrace of the decline from the 2018 high and June 2016 low.

NZDUSD 4 HOUR

NZDUSD is rolling over from the top of the channel from the March low.  .6323/50 is a possible bounce level.  This is the center line of the channel and the 38.2% retrace of the rally from the May low.  Bigger support is probably the lower parallel and 61.8% retrace at .6166.  Proposed resistance is the 6/9 low at .6469.

USDCAD 4 HOUR

USDCAD is headed to the top of the channel, which intersects the 5/29 high at 1.3833 early next week.  If price pulls back then I’d think that support is near 1.3541.  This is the 6/4 high and was an important level after the gap higher on 3/9 (Saudi crude news).

6/10 – USDCAD tagged 1.3329 today (low was 1.3315) before rallying to close more or less unchanged and form a doji in the process.  The 78.6% retrace is 1.3319 and the decline from the high consists of 2 equal legs (1.3329).  The lower parallel from the channel was also support today.  Bottom line, there is a lot of technical consideration for support so I’m looking higher.  Initial resistance is 1.3570.

USDJPY 4 HOUR

USDJPY has tanked (remember that 4 hour volume reversal last Friday!?).  This is a decent spot for a bounce however (median line is here).  A bounce would set up a short opportunity into 107.77-108.08.  This zone was resistance in April and May.