Education
December 30, 2021
This is the last update of 2021. A new calendar year is significant and those details will be addressed next week. The charts in this post highlight why I’m heading into 2022 with a USD bearish mindset. The chart above is a starting point insofar as making a USD bearish argument although the big picture ‘textbook’ trigger doesn’t occur until a break of the channel near 95. Until then, respect potential for strength into the 61.8% retrace of the decline from March 2020 at 97.73.
December 23, 2021
EURUSD is once again flirting with an important breakout above the trigger line. Price is more or less right at the line now. Again, a break above is needed in order to indicate an important behavior change. Ideally, price rises a bit more before pulling back to the line near 1.1300 and holding it as support. That’s the setup at least! Near term upside remains about 1.1520.
December 21, 2021
Cable remains above the high, although barely. I continue to ‘think’ higher in GBPUSD given the well-defined price level that price is hovering above. Again, this is VWAP from the March 2020 low and channel support. There is also the high from March 2020 and the 38.2% retrace of the rally from March 2020. Finally, there is RSI divergence on the 4 hour chart. Magenta dots in the chart below show divergent readings over the past year.
December 17, 2021
The equity ‘market’ has felt odd recently. A look beneath the surface confirms this suspicion. The 30 day Nasdaq advance-decline line is plotted below the composite index. The AD line closed at -637 today. The magenta dots indicate readings of -600 or lower. Previous readings this occurred at the Dec 2018 low and for several weeks in March-April 2020 (the first reading was 3/18/20). Prior to the last few years, readings this low occurred in October-November 2008 and during the 2000-2001 decline! Those periods are shown in the charts below. So, the A-D line is ‘oversold’ yet the QQQ closed a bit more than 5% off of the all time high today. All of the prior ‘extreme’ AD readings occurred after for more meaningful declines. The only takeaway I have is that if the index continues to decline but the A-D line improves then look out below because the next low won’t be until the next extreme A-D reading.
December 16, 2021
Is the nightmare correction over for EURUSD? The ‘look’ is definitely there. For Elliott nerds, everything from the 11/30 high constitutes a complex correction labeled W-X-Y. This means that the drop is in 3 waves but the corrective legs of the structure are also corrective in nature. Upside focus is the 161.8% retrace at 1.1540, which is also the 10/29 low. Proposed support is the high volume level from today at 1.1273 and 61.8% of today’s range at 1.1252. ECB is tomorrow.
December 1, 2021
The DXY high is right on the trendline that was pointed out last week (see chart below for the full picture)…we may have just seen a major top. Trading wise, I’m looking towards 93.30/50 with 95.20s as a possible bounce level. The lower zone is channel support. That will be the big test. If DXY is a bear then 96.20s should provide resistance.
November 30, 2021
USDJPY reversed sharply last week and high was 115.52! Near term downside focus is 112.20s and 114.50s sticks out as possible resistance. This is the 61.8% retrace of the decline from the high along with the 25 line of a short term fork. The 75 line provided support (so far) so resistance at the 25 line would make sense.
November 19, 2021
The TRY crisis has led to USDTRY near (or at…I’ll explain) the top of a decade + channel. The channel top when using intraday highs/lows is about 11.61. When using daily closing prices, USDTRY is at the line now. An interesting juncture and one that wouldn’t be surprising as resistance. That’s as bold as I’ll get regarding USDTRY comments right now.
November 18, 2021
EURUSD low today was 1.1263. How about that trendline! I can’t think of a better technical combination, a Fibonacci level and long term well-defined trendline, to mark an important turning point. I am bullish against the low. The first hurdle on the upside is the weekly opening price at 1.1446 followed by former support at 1.1525. Support should be 1.1290-1.1300.