Market Update: November 18

SPX DAILY

Neither SPX or the Nasdaq have broken above their reversal day highs from last week (11/9).  What’s more, SPX has reversed yet again from the line that connects highs since 2018.  Don’t forget that this line crosses major pivots for the last 88 years (monthly chart is below).  U.S. equity valuation is at a peak as well (see 2 charts down).  I’m a bear up here.

SPX MONTHLY

U.S. EQUITY VALUATION: PRICE TO SALES

GOLD HOURLY

Gold continues to stair step lower.  Recall that the big level to pay attention to on the downside is probably about 1780 (this is based on an important parallel).  Price is threatening to break lower from a short term bearish flag.  Bottom line…this chart is bearish, especially after the massive outside bearish day (show of weakness in Wyckoff logic) on 11/9.

DXY DAILY

DXY is STILL sitting on top of the long term trendline support.  The last 2 daily candles have a bullish ‘look’…long lower wicks with small bodies and small upper wicks.  The weekly chart is below to remind of the importance of the current level.

11/10 – DX made a bullish volume reversal on 2 x the 20 day average of volume on Monday.  Volume reversals with the magnitude of volume are shown on the chart.  Not bad!  The only false signal was in October 2016.  The volume reversal suggests that the USD decline from the September high is a B wave (EURUSD rally a B wave as discussed in recent posts).

DXY WEEKLY

USDCAD HOURLY

The short term corrective drop has played out in USDCAD and it’s worth trading against today’s low following the late day reversal higher.  It’s early but a level to keep in mind on the upside in the coming days is where the rally from the November low would consist of 2 equal legs at 1.3279.  Another reason to trade against today’s low is that futures traded above and then below VWAP from the high (see futures chart below, which is quoted CADUSD) and an hourly volume reversal triggered.

11/17 – Still tracking for that high low in USDCAD.  A proposed short term structure is shown in which a small b wave tops near 1.3125 before a flush lower in wave c completes the corrective decline bear 1.3020.  Maybe this happens on Canadian inflation data tomorrow.

CANADIAN DOLLAR FUTURES HOURLY

NZDUSD DAILY

Kiwi tagged the 2019 high today at .6942.  The December 2018 high is just above at .6969.  Simply, be aware of significant horizontal levels because reactions tend to occur.  Also, I’m interested to see how NZDUSD closes this week in relation to the multiyear channel.  A close below would be viewed in a bearish light.