May 27, 2021

Market Update 5/26 – Extreme USD Sentiment Indicates Reversal Risk

The demise of the dollar? Reserve currencies in the era of ‘going big’. BITCOIN AND THE DEATH OF THE US DOLLAR. Markets oscillate between extreme optimism and extreme pessimism. The above headlines suggest that the USD is at/near a bearish sentiment extreme…and therefore a price bottom.
May 26, 2021

Market Update 5/25 – CTAs Chasing USD Shorts Again

Not surprisingly, CTAs are chasing USD shorts again. Of course, this tends to happen just before a turn (then they chase the USD higher).
May 25, 2021

Market Update 5/24 – NOKJPY Idea

NOKJPY is an interesting chart. Price has rolled over from the trendline that connects the 2007 and 2013 highs. If a bigger down move is underway, then I’d expect resistance from the underside of the red trendline near 13.15. A longer term chart is below.
May 21, 2021

Market Update 5/20 – Tracking a Big EURJPY Level

EURJPY action since the October low has taken the form of a wedge. The rally stalled this week after taking out the September 2018 high but I’m wondering if we get a final spike into 134.30, which is both the 61.8% retrace of the decline from the 2014 high and 2 equal legs up from the 2020 low. A close-up view is below.
May 20, 2021

Market Update 5/19 – AUDUSD and NZDUSD about to Break Down?

Since the 5/10 high, AUDUSD has dropped in 5 waves, rallied in 3 waves, and dropped in 5 waves at a lesser degree. An Elliott wave textbook! Resistance should be .7760/70 now. Broader downside focus is .7415 (2 legs down from the February high and the September high…see below). 5/18 – AUDUSD tagged .7814 today. Again, this is the 61.8% retrace of the decline from 5/10 and well-defined resistance since early January. This is a great spot for AUDUSD to roll over. .7730 needs to give in order to ‘open the floodgates’. This level is 2021 VWAP, VWAP from the February high, and VWAP from the March low (see futures chart below).
May 19, 2021

Market Update 5/18 – Keeping an Eye on Aussie Crosses

AUDJPY is in black and BTCUSD (bitcoin) is in magenta. My six year old son is standing behind me as a I type and just said ‘they look the same’. He’s right! We’ve been waiting for AUDJPY to tag the underside of the trendline from the 2008 low since February (AUDJPY is below). That line is currently about 86.50. I’d love a spike into that level to short but I’m not sure that happens with BTCUSD already breaking down. I’ll wait for 86.50 (or so) unless price breaks under the line that crosses lows since 4/23 (see magenta line on 4 hour chart below)
May 18, 2021

Market Update 5/17 – BTCUSD and Tulips

The Dutch Tulip bubble also occurred during a pandemic. One popular narrative for tulip price behavior blames excitable Dutch merchants who had nothing better to do than sit around in taverns bidding up the price of exotic flowers (global trade was effectively in “lockdown” then)…sound familiar? BTCUSD closed right at the noted 44000 level today. Big spot! I lean towards the downside following completion of the massive top that has been forming since February. The next downside level of interest is 32000 (or so).
May 12, 2021

Market Update 5/11 – Watch the Nikkei

The Nikkei reached the lower parallel of the Schiff fork mentioned 3 weeks ago. The level is also support from March (3/5 and 3/24 lows). Huge level! A break below would complete a topping process that has been underway since 2/16 (descending triangle). Note that this possible topping pattern has taken place at the upper parallel of the channel from the 2009 low (see monthly chart below).
May 11, 2021

Market Update 5/10 – GBP Crosses Reach Important Levels

GBPUSD has soared over the last 2 trading days. Today’s break above the well-defined 1.4000 could propel price on its next leg up within the long term bull move but there is consideration for resistance at the current level. Daily reversal resistance is 1.4140 (2/24 close) and the underside of the trendline from the March 2020 low is slightly higher (red line). Let’s see what happens over the next few days.
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