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.
April 23, 2021

Market Update 4/22 – Pause in Precious Metals Rally

SLV has also run into 2021 VWAP. A pullback ‘makes sense’ with support near 23.60. The equivalent level for spot is 25.62. A big reason to hold a constructive longer term view on silver is the fact that VWAP from the March 2020 low has provided support on multiple occasions.
April 22, 2021

Market Update 4/21 – Watch EURJPY Up Here!

I’ve been tracking EURJPY for a top as it approached the underside of the trendline from the 2012 low since February. On Tuesday, price spiked higher and reversed yet just missed the trendline. I ‘want’ to short. A break of the trendline from the November low is needed in order to trigger.
April 21, 2021

Market Update 4/20 – Risk Reversing

AUDUSD reversed sharply lower today after coming within pips of the 61.8% retrace of the drop from the February high and early January high. Near term downside focus is .7620. Proposed resistance is .7750.
April 2, 2021

Market Update 4/1 – The Copper/Gold Ratio and Inflation Trends

The copper/gold ratio is churning at 8 year trendline resistance. A pullback/consolidation of gains over the last year (the ratio bottomed in April 2020) ‘makes sense’ from this level. This is an important ratio to watch for clues on interest rates (Gundlach often references this ratio) and trends in inflationary/deflationary assets (notice the deflationary crash into the 2009 low and recent inflationary rally for example). I prefer to look at the 30 year bond rate rather than the 10 year note because the long end is more indicative of inflation. The copper/gold ratio and U.S. 30 year bond yield are shown in the chart below. So…pullback in the ratio from resistance…and pullback in rates (also from resistance…see 2 charts down)…which may mean a deeper pullback in the ‘inflation trade’. In FX, this would mean higher USD (already underway), lower commodity currencies (getting started), and lower Yen crosses (waiting on the turn).
March 31, 2021

Market Update 3/30 – Big Spot for USDJPY

USDJPY continues to rip higher but price has reached an interesting level. The level in question is the line that extends off of the 2018 and 2020 highs. Seasonal tendencies also top this week. This trendline/seasonal combination makes for a great opportunity to fade the move but we need price to suggest that some sort of a top is in place. An intraday volume reversal for example would suffice.
March 30, 2021

Market Update 3/29 – Short GBPUSD Setup

GBPUSD spiked up to 1.3840s today before pulling back. Interestingly, 1.3840 was the level I was looking for resistance last week because that was last week’s open. Better defined resistance is 1.3880 but the rally from the low is in 3 waves and the drop from today’s high is impulsive. I like shorts into 1.3812. Given the failed break above long term trendline resistance last month, downside may be significant. Another reason to favor downside against today’s high is the fact that the rally failed near VWAP from February FOMC.
March 25, 2021

Market Update 3/24 – Great AUDJPY Short Setup

I love this AUDJPY short setup. Price has broken below the trendline from the November low. The underside of that line is now proposed resistance at 83.65/90. The 2/26 low is a bounce level at 81.98. Downside is the lower parallel from the bearish fork, which is significant (probably a 78 handle).