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November 23, 2020
Gold tagged proposed resistance on Friday and dumped today…beautiful. Price is quickly approaching the long held support near 1780. This level is an important parallel and the lower channel line from the bearish channel off of the August high. I’ll be paying close attention to 1780 for reversal evidence.
November 19, 2020
Assets prices were down in early U.S. trading as the USD rallied but everything reversed course when the magical U.S. session got underway (stocks up, metals up, USD down, etc.). I still like gold lower but a bit more strength may be in order to test resistance near 1876.
November 18, 2020
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).
November 9, 2020
DXY continues to trade at/just above a major long term level. Nothing has changed. This is support until broken (daily closing basis at least). The UUP (see below) warns that last week’s drop is a trap. The red bars on the UUP chart show when price closed at a 52 week low with volume at least as high as it was last week (1.8 x the 13 week average). Every instance except one (highlighted in yellow) was a capitulation low. Stay tuned.
November 4, 2020
EURUSD traded into resistance as early polls closed, tanked to its lowest since 7/24 and then ended the day unchanged. So 2020. Bottom line, resistance was hit so I favor the short side. Weakness below 1.1700 (most recent high volume level and support in August and October) would warrant taking a shot.
November 4, 2020
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October 27, 2020
In case you haven’t heard, there are elections (president, congress, senate) in the U.S. next Tuesday, November 3rd. Do markets, notably the U.S. Dollar, tend to trade a certain way before and after U.S. presidential elections? In an attempt to answer this question, I plotted DXY in the 3 months leading up to and one month after every election since 1972 (blue for a Democratic win and Red for a Republican win). Each time series is compared to current DXY (in black). The vertical black line indicates election day. You’ll find these charts at the end of this report.
October 22, 2020
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).
October 13, 2020
Gold has turned down from the 200 period average on the 4 hour chart, short term trendline, and 2011 high. Notice the action around the 2011 high over the last few months…gold remembers! Focus remains lower. 1760 appears critical for longer term support. This is the May high, near the 200 day average, and is a parallel that crosses highs and lows since August 2019.