Market Update 11/9 – Important Stock Market Signal

DIA DAILY

There were sharp reversals across the equity landscape today but the one that stands out most to me is in DIA (Dow ETF), due to volume.  Volume today was 2.57 x the 20 day average…which is significant.  Reversals with volume at least 2 x the 20 day average are plotted.  There have only been 3 periods where DIA has triggered volume reversals with this much volume.  There have been 3 since January 2018 (including today), there were 2 in 2007 (including the day of the October 2007 high…see below), and there were 4 in late 1999 / early 2000 (see 2 charts down).  Today could mark the top for years to come.

DIA DAILY

DIA DAILY

TLT DAILY

TLT has reached the long term parallel that was noted as the ‘critial level to pay attention to’ several weeks ago.  Simply, this is a major decision point.  Weakness below would be a game changer but support is support until broken so I’m thinking bounce.

10/22 – Bonds have been the big mover leading up to the U.S. election.  TLT is under the 200 day average for the first time since December 2018.  The next critical level to pay attention to is 153-154.  This is the bottom of a short term channel, the June low, and the long term upper parallel from the channel that originates at the 2007 low (magenta line).  The upper parallel nailed tops in 2012, 2015, and 2016 and the low in June.  A long term chart is below.  Expect the level to act as support BUT a break below would indicate a major behavior change in TLT (and bonds generally).

EURUSD 4 HOUR

EURUSD turned lower after spiking above the important 9/10 high.  As mentioned yesterday, my ‘favored’ view is that action since the September low is a B wave.  Focus is lower in wave C towards 1.1495 (2 equal legs down would be 1.1510).  Also, an 8 hour volume reversal triggered today (see below).  These have been reliable in recent years.

11/8 – EURUSD analysis/thoughts are similar to AUDUSD with respect to the flat/triangle scenario from the September high.  Pay attention to 1.1916 and especially 1.2011 for resistance.  The latter level is the September high and long term trendline resistance.  Proposed support is 1.1750/90.

EURO FUTURES 8 HOUR

AUDUSD DAILY

AUDUSD tagged resistance today and rolled over.  I’m simply trading the levels here.  Focus is lower towards the top side of former trendline resistance, which is near .7110.

11/8 – My first reaction when viewing AUDUSD price action from the September high is that a flat or triangle is unfolding.  I mention this because the drop into the September low is in 3 waves and therefore most likely a B wave.  This leaves everything from the September low as a B wave of one larger degree.  If this sounds like hocus pocus, then just focus on the levels….7325/45 is proposed resistance.

USDJPY 30 MINUTE

USDJPY took out nearly all of last week’s post election decline in several hours.  The rally is impulsive (5 waves) so strategy calls for buying a dip.  Proposed support is either 104.70s or near 104.15.  Upside focus could be significant given the one sided positioning (COT), which was discussed in a note last week.  Also, a volume reversal triggered on a daily basis with today’s volume greater than 2 x the 20 day average.  That has only happened 3 times in this direction (see below).

YEN FUTURES DAILY