Market Update: September 30

GOLD FUTURES 4 HOUR

Gold traded into proposed resistance at 1908 today and immediately pulled back.  I am of the view that price resumes lower from the current level towards the lower parallel near 1750.  Failure to stay below today’s low would risk strength into the upper parallel of the bearish channel near 1940.

9/24 – Gold has dumped in proposed wave C as suggested.  There are 2 levels to pay attention to for a low; 1807 and 1754/69.  The first level is the LONG TERM (life of gold) parallel (magenta line) that was most recently resistance in April and June.  The lower level is where waves A and C would be equal as well as the lower parallel of the bearish channel.  Resistance should be 1908 if reached.  For GLD (see below), the level to know for a low is 169.56, which is also the lower parallel from the bearish channel and VWAP from the March low.  Finally, the analog that we’ve been following since December suggests a low at the end of the month (see 2 charts down).

COPPER FUTURES 4 HOUR

Copper broke steep uptrend lines last week before bouncing.  Today’s high is at the 61.8% retrace of the decline from the 9/21 high (exact 61.8% retrace).  Recall that 9/21 was a bearish outside day and that 9/23 was a bearish engulfing day.  Today’s high is a great spot for a lower high to register.  I am looking lower.

USDCHF 4 HOUR

USDCHF pulled back to .9200 before turning up and finishing slightly higher on the day.  I view today as a re-test of the breakout level and am bullish against today’s low.  Near term upside focus is the trendline from the March high near .9375.

9/27 – USDCHF completed the head and shoulders bottom and near term focus is on .9370s (trendline from March high and former support).  A pullback to the breakout level (.9200) would present an opportunity to buy the re-test for another leg up.

USDJPY 4 HOUR

USDJPY rolled over from the 25 line within the channel from the March high…again!  This line has been precise resistance for 3 months.  Focus is lower into 104.69/90.  The lower end of this zone is the 61.8% retrace of the advance from the 9/21 low and intersects the channel center line.  That may end up providing support for a higher low since the rally from 9/21 appears impulsive.  The high volume level from today is resistance at 105.59.  The relationship between Japanese equities and Yen isn’t as strong as it once was but it’s interesting to note that EWJ (MSCI Japanese ETF…unhedged) reversed from it’s year open yesterday and left a failed break above trendline resistance in the process.  The setup is bearish (chart below).

9/27 – USDJPY continues to inch higher and is nearing proposed resistance at 105.90, which is also the 50 day average and month open (maybe a doji for September?).  I am ‘thinking’ pull back from that level with support still near 104.90.  It’s possible that last week’s reversal is significant.  The weekly chart below shows weekly key reversals with a volatility filter (J Spike) over the last few years.  Signals have been reliable.  Finally, dealers are extremely short Yen (long USDJPY), which is bullish (2 2 charts down).

EWJ DAILY

USDCAD 4 HOUR

USDCAD didn’t quite reach the objective and I trailed out of longs today at 1.3320.  1.3250 remains in line for support.  The level is now reinforced by the line off of the 9/1 and 9/16 lows.

9/23 – USDCAD is nearing the measured objective of 1.3499.  The trendline off of April and May highs is in line with the 7/30 high at 1.3460 so consider 1.3460-1.3500 a possible near term resistance zone.  Support should be 1.3250 now.