TRADES FOR FRIDAY, MAY 24, 2019
EMOTION is your enemy more than any market will ever be.
WHERE COULD CRUDE GO? Today it fell apart and confirmed a downtrend on its daily chart to the rally that started last December and ended last month. By taking out 60.10 on the daily chart it established a second wave down since the April high. Todays action also met the potential projection for that second wave down. It also reached some market support at 58.00 as well as the 38.2% retracement of that entire rally referred to above. This increases the potential for a rally from this level to set up for a third wave down. If it does, that rally should present a shorting opportunity too. So to where?
Farther out a 50% retracement of the rally that ended last month would bring crude (basis July) to 55.00 approximately. A 61.8% retracement could bring it down to 52.50.
But if crude fails the 61.8% retracement and threatens last Decembers low of 45.00 and fails it, then crude could be right back where it started in early 2016 at 35.00.
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GOAL OF THE MARKET UPDATE: To give traders a technical explanation of market behavior with the goal to educate and better understand and trade the markets. What I convey to readers is not a personal opinion but what the markets are suggesting by their technical formations and action.
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JUN GOLD: Today it made up for the lackluster response it had yesterday to holding at the 200 avg. again. It finally rallied but was stopped by the 1285.00 resistance. Both the 10 & 20 avg. intersect in that area too so gold is dealing with more than one resistance on its daily chart. If it can follow through with a further rally, it could rally to 1305.00. But its work is cut out for it. The problem is the 1290.00 resistance on its weekly chart. It has been a nightmare for gold. Since failing it in mid-April, it cannot close over that level. It has tried every week since and failed. That level is not only market resistance but also the 100 avg. resistance and now the 10 avg. resistance also merge in the same area. Just watching.
JUL SILVER: It rallied today too but was stopped by its 10 avg. on its daily chart. Nothing new here since this has gone on for months. Every rally attempt is ended by either that average or the 20 avg. directly above it. Just watching.
JUL COPPER: It formed a reversal bottom today on its daily chart just barely. It is overdue for a rally but its new resistance level is 272.00. Long term it is responding to the 265.00 support that I had mentioned it could reach.
JUL CRUDE OIL: It fell apart today. I had mentioned that the long term charts were negative but on the daily chart it had and was holding the 61.00 support. Yesterday I said it needed to take out the 60.10 low to confirm a second wave down. It did so today. Long term the charts suggest this should go down to 55.00 at least near term. Technically it could easily reach down to 45.00. It reached some support at 58.00 today. Also the potential for this second wave down has met projections. So if there is an interim rally from this level, it should give an opportunity to short since it has now established a downtrend.
CURRENCIES & FINANCIALS:
JUN YEN: I exited the short position yesterday with a profit and thank goodness I did. Today it rallied right back over resistance and would have taken back every bit of the profit. As it stands now, it doesnt seem interested in filling the 90.33 gap. So what does this rally mean? Its the same old story. The rally is either to test the May 13 high and fail to resume the downtrend - or it will take that high out. So far on both long term charts it rallied up to resistance today and stopped. On the weekly it is the 100 average. It has exceeded that average twice before only to fail. On its monthly it is the 20 average. But if it does take that high out it could rally to 93.00 near term at least. Just watching for now.
JUN SWISS: It was consolidating and broke out to the upside today. I have wanted to buy it again but todays action has put that on hold. Long term it appears it will hold the long term 98.00 support. If that be the case this rally could be just the start. Watching closely to buy.
JUN DOLLAR INDEX: As usual just as it looks great, if fails. After a new high on its daily chart today it quickly panicked and dropped like a rock. It formed a reversal top and will probably have another near term selloff. Lower support comes in around 97.400. Keep in mind the weekly chart triggered a buy this week. Just watching.
JUN EUROFX: With the dollars dramatic reversal top today, of course, the eurofx also established a dramatic turnaround with a reversal bottom. How far or how long this will last remains to be seen. Just watching.
JUN AUSSIE: It sold off further since last Thursday and formed another double bottom today. The daily chart suggests another rally attempt. As mentioned last week the monthly chart is triggering a sell this month but it is holding in the same area that formed a bottom in 2015. Watching closely.
JUN CANADIAN: Last Friday it tested the April 24 low of 74.04 again and held. It rallied and, again today, almost tested that low again. Bottom line all this market has done since April 24 is consolidate on the daily chart with the high end up around 74.80. The monthly chart isnt that clear. It could test a lower support down at 73.00 but technically doesnt suggest that. And the weekly suggests another wave down but is stuck in the current consolidation. Best just to watch.
JUN S&P: Ive been waiting to short again but have held back as it appeared to be fighting further selloff. That all changed today and it sold off to previous support on the daily chart around 2810.00 with better support at 2800.00. I still want to short but not at this level.
JUN 10 YEAR NOTES: The buy on their monthly chart took hold today when notes took out their March high on their daily chart. On their monthly chart they will reach their 100 avg. up at 125.280. Just watching.
JUN BONDS: Unlike notes, their 100 avg. is under the current market. Their target could be their gap up at 154.14 on their monthly chart as they took out their March high too.
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