News and Analysis

Market Update – September 9

QQQ HOURLY

QQQ has broken down and the same levels are in focus that were noted yesterday (text below).  All I’m adding is that if price bounces from here (a gap up on news tomorrow for example) then 279 is proposed resistance.

9/7 – QQQ tested the trendline from the 4/21 low and 200 hour average before bouncing on Friday.  A break below this combination would signal an important behavior change.  In that event, pay attention to the magenta trendline near 257 (see daily chart below for long term view) and then the February high at 237.47, which is in line with VWAP from the March low (not shown).

GOLD 4 HOUR

Action since the August low in gold is a triangle…specifically a B wave triangle.  Proposed resistance for wave e and the end of the triangle is 1969 (the equivalent level in spot gold is 1962).  This is where wave e would equal 61.8% of wave c.  Notice how wave c is exactly 61.8% of wave a.  61.8% relationships between alternating legs in triangles is common.  It’s too early to think about eventual wave C downside but the analog that we’ve been following for quite for some suggests downside through September (see below).

9/2 – Gold continues to churn above the critical 2011 high.  A break below would signal a massive bull trap/fake-out and probably lead to a downside acceleration.  Failed moves lead to fast moves.  Consider 1923 the trigger.

GOLD DAILY

GBPUSD 4 HOUR

GBPUSD turned from the ‘massive’ level and has already wiped out August’s gains.  Price could bounce from the 1.2940/80 zone (prior congestion…highlighted on the hourly chart below).  If it does then 1.3110/20 should provide resistance for weakness into 1.2814 (June high).  The top side of the line off of the December 2019 and March 2020 highs near 1.2500 could be in play at some point too.

9/1 – Cable high today was 1.3483.  Keep this simple.  1.3500 is massive.  This is the 2009 low, where price settled after Brexit prior to a final leg lower, and the 2019 high.  The fork from the 2016 high was confirmed today as well.  Strong reactions in the opposite direction tend to occur after the initial touch of the median line.  If price does pull back, then pay attention to 1.2660-1.2790 (see daily chart below).

GBPUSD HOURLY

NZDUSD 4 HOUR

Short term downside focus for Kiwi remains .6533 but proposed resistance now is the center line of the channel from the June 30th low near .6660.  Price consolidated around there before U.S. hours before breaking down.  That type of action suggests that the line will be resistance if re-tested (see short term chart below).

9/7 -Kiwi turned from its long term well-defined .6750-.6800 zone.  The drop counts in 5 waves and an up-down sequence is visible since the low.  As such, a rally that takes out .6735 is possible before the next leg lower.  Short orders just above that level are appropriate.  Initial downside focus is the line off of the 6/30 and 8/20 lows.  This line intersects the 6/23 high at .6533 this week.

NZDUSD 10 MINUTE

USDCAD DAILY

USDCAD followed through on the 9/1 reversal and broke above the trendline from the March high today.  Initial upside focus is the line off of highs in April and May, which intersects the 200 day average just above 1.3500.  The top side of the broken trendline and 9/3 high at 1.3162 should provide support now.

9/1 – USDCAD came within a hair of the year open today, which is 1.2987.  I’ve mentioned in these pages over the years that reactions off of the year open offer great trading opportunities.  For example, see the 2014 and 2018 examples.  If I draw a trendline from the 2016 high and September 2019 high, you’ll see that price held the topside of that line today.  This line is probably more appropriate because it cuts through many more highs and lows than if the line uses the January 2019 as the second pivot (see zoomed in chart below).  What’s more, CAD futures made a bearish volume reversal today (bearish CAD is bullish USDCAD).  As you’ll see on the last chart, the signals have been reliable in recent years.  Above 1.3200 (trendline from March high) would suggest that trend has reversed higher in USDCAD.

AUDJPY DAILY

AUDJPY rolled over just shy of the noted 6 year trendline.  Price is testing a massive level now from former resistance and a short term channel.  A break below would in effect leave a failed breakout.  Failed moves lead to fast moves and I’d be looking for 72.50/80 at that point.  If price bounces here then watch for 77.10 resistance.

8/31 – AUDJPY is nearing the line that connects the 2014, 2017, and 2018 highs.  The line is about 78.80.  If price overshoots, then be aware of the 200 week average at 79.90.  Notice the myriad major turns off of the 200 week average over the last 20+ years!