After today’s rally, SPX has retraced 23.6% of the decline from the Feb high. Bigger levels for resistance are the 38.2% at 2592 and ultimately the 50% level, median line, and June low at 2729. I think that’s where the market is headed before another leg lower begins. The hourly futures chart below outlines near term support from VWAP off of the low, currently at 2300. SPX may want to take out 2499 first before pulling back. Regardless, focus is on identifying a higher low with the aid of VWAP off of the low.
3/23 – 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 500 FUTURES (ES) HOURLY
DOW FUTURES (YM) HOURLY
The Dow dropped the most from the high and was also the biggest gainer today. My takeaway from this is that the Dow is reflecting current mood the best of any major index. VWAP off of the low should help in identifying support now. That’s currently about 19180. Price may need to take trade into the 20882-21248 zone before pulling back. Ultimately, the median line near 23600 is where I’m looking for the next major resistance.
Gold blew through the noted zone. Best guess at this point is that 1790-1800 is the next upside level and that 1590 is now support. In fact, there were periods in 2009-2010 and in 2013 when gold traded between the 2 parallels that I’m using to designate support and resistance now. For reference, the long term chart is below.
3/23 – 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.
BTCUSD 4 HOUR
Watch for BTCUSD resistance near 2020 VWAP at 7250. 2020 VWAP has proved a useful pivot all year. Expectations are for weakness from that level. 5570-5750 is in line for eventual support.
There is now a well-defined bullish structure to work with in AUDUSD. The lower parallel of the Schiff fork is proposed support now near .5820 (also a high volume level). Near term upside focus is the upper parallel, which is .6175/85 tomorrow. Spot and front month futures (June) are currently trading at the same price, which makes it easy to use the VWAP levels from futures to trade spot. VWAP from the March high is .6004 and a level to know for near term resistance. VWAP from the low is .5818…right in line with noted support (futures chart is below).
AUSTRALIAN DOLLAR FUTURES HOURLY
GBPUSD low is still 1.1414. Remember, that level is huge on a long term basis. Near term structure isn’t as clean as AUDUSD but it’s not terrible. Watch for support in the 1.1547-1.1606 zone (high volume level and daily reversal support). Near term upside levels for resistance are 1.2003 and the upper parallel, currently near 1.2150.
3/22 – GBPUSD reached 1.1416 (low was 1.1414 on Friday…see below). As the week opens, price is holding the high volume level from 3/18 at 1.1547. As long as price is above that level, it’s ‘OK’ to be bullish. Also, there is a short term fork (see 2 charts down) that suggests support near 1.1550.
EURUSD 4 HOUR
EURUSD traded into proposed resistance and pulled back today. All else being equal, I’d look to short near 1.0830 and target the noted 1.0530 but USD sentiment is reversing from extreme levels and don’t forget that USDOLLAR has responded to decent resistance. I think there are better places to play the short side of the Euro…notably EURAUD.
3/23 – 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.
EURAUD made a ‘panic high’ last Thursday at the upper parallel of the channel from the 2012 low. Focus is towards the median line near 1.7200. The median line was resistance for years, so it’ll probably provide support now. Proposed resistance for entry is daily reversal resistance (Thursday’s close) at 1.8579. I obviously don’t know if that gets reached. If price starts to break down now then the plan will be to sell into the 200 hour average at a later date.