We looked at the Dow yesterday and the median line at 17418 is the spot to watch for a low. That’s a little over 1000 points below today’s close (a regular day in this environment). SPX has entered an important zone. The top of the zone is the lower parallel from the bearish fork, which was support today. The bottom of the zone is the line off of the Feb and Dec 2018 lows near 2105. That’s about 6% below today’s close. Again, a 6% drop in this environment is ‘normal’. As always, I’ll be paying attention to volume activity, especially on the 4 hour chart (see below). We’ve had 2 bullish signals since the top, on 2/28 and 3/18. Both were temporary lows (the 2/28 low was a decent signal). I’d like to see a volume reversal before suggesting that some sort of low is in place.
S&P FUTURES (ES) 4 HOUR
Weekly RSI on the Dow last week registered 19.32. A weekly RSI reading of 19.5o has occurred 4 times since the 1930 low (Tradestation only allows 90 years of data). Now, the week of the Oct 2008 low, June 1962, and May 1940. The previous 3 instances gave way to at least a bounce.
DOW 1930S-1960S WEEKLY
GOLD 4 HOUR
Gold is closing in on noted resistance. I’ve been in ‘tune’ with gold’s movements for quite a while and I’ll be on the lookout for reversal evidence in the 1580-1603 zone.
3/22 – No change here. I am still looking for a countertrend rally with resistance now in the 1580-1603 zone.
Watch for resistance on this silver rally near 14.15/27. There’s a parallel within the channel from the 2011 high that crosses the June 2018 high, Jan and Feb 2019 highs. Ultimately, a retest of the 2009 low is in order before it’s time to think longer term bullish again. In fact, the gold/silver ratio may hit 180 before it’s time to get bullish silver (180 is the top of the long term channel…see below).
GOLD/SILVER RATIO MONTHLY
EURUSD 4 HOUR
The noted 1.0530 (give or take) remains in focus for EURUSD (see long term chart below). Near term, consolidation the last 2 days is viewed as a 4th wave. Watch for a bit more upside to test the 38.2% retrace of the wave 3 drop at 1.0862.
3/19 – EURUSD traded to a 52 week low in Feb, reversed sharply to trade to a 52 week high in March, and is now back at a 52 week low. What a disaster. From here, pay attention to 1.0530. This is weekly reversal support (close of the low week from 2017). The area around 1.0530 was also support in 2015.
USDCHF closed right on the line off of the 2018 and 2019 lows. Price traded around this line in late February before collapsing (with equities and now the entire USDCHF move has reversed). There is also the line off of the 2019 highs just above the market near .9910. Bottom line, this is a good spot for USDCHF to turn back down. I’m not sure if price tests .9910 however (takes out today’s high and then reverses) so I’m standing aside for now.
Focus for USDJPY resistance remains 111.80. A break through, although unexpected, would be significant. Be sure to follow Twitter for updates to the near term picture (volume reversals for example and entry).
3/19 – We expected the 118 support but I wouldn’t have thought in a million years that USDJPY would be back at this level so quickly. In any case, pay attention to the massive trendline confluence at 111.80 for resistance. The 3/13 and 3/18 highs at 108.48/65 are now proposed supports.