Month: September 2020

Euro Forecast

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Commercials last went record short in the Euro currency back on August 25th. Sometimes you see an immediate sell-off and other times it takes weeks to see the market turn. This market went through a two month consolidation period and formed a head and shoulders top. This bearish pattern was confirmed on Tuesday with a close below the neckline. The downside target is around 1.1500. I think we will see prices reach this target, which also contains the 100 DMA and a 261 fib extension of an ABCD pattern formed with the right shoulder. If prices breach the 100 DMA, then I think we could see a move lower down to a volume @ price cluster around 1.1350-1.1250. I would look to sell any rally that tests the H&S top neckline. There is a strong volume @ price cluster just above it along with a downward sloping trend line, the 50 DMA, and the 34 EMA wave. This is a market to watch over the next few weeks.

Futures Markets Trend Zone EOW 9/25/20

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I look for pullback trade set-ups in trending markets and one helpful tool I use is my trend map. I follow 37 markets and break down each market into 5 categories:

double green (very bullish)(5)
single green (bullish)(4)
yellow (neutral or sideways)(3)
single red (bearish)(2)
double red (very bearish)(1)

Here is my futures markets Trend Zone as of Friday’s close. The overall temperature is now skewed to the bearish side for the first time since I started tracking this 9 weeks ago. We went from 21 markets sporting a 4 or 5 on the spectrum down to 14. We now have 19 markets with a 2 or 1 on the spectrum. The biggest movers week to week were Silver (SI) and the Australian Dollar (AD). They both moved down 3 slots from double green (very bullish) to red (bearish). This could be the start of a trend change for both of them.

The big question now becomes is this a correction before resumption of the preceding bullish trend for the majority of these markets? Or is this the beginning of a major trend change? I think we could see some choppy consolidation for the rest of this year. Stay tuned.

Double_GreenSingle_GreenYellowSingle_RedDouble_Red
Very_Bullish (5)Bullish (4)Neutral (3)Bearish (2)Very_Bearish (1)
@C@FV@BO@AD@HO
@LH@JY@HG@BP
@S@LC@MP1@CD
@SM@RB@US@CL
@TY@EC
@W@ES
@CC@FC
@CT@GC
@SB@NE1
@DX@NG
@NQ
@PL
@RTY
@SF
@SI
@YM
@KC
@OJ
4104181
10.81%27.03%10.81%48.65%2.70%

Futures Markets Trend Zone EOW 9/18/20

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I look for pullback trade set-ups in trending markets and one helpful tool I use is my trend map. I follow 37 markets and break down each market into 5 categories:

double green (very bullish)(5)
single green (bullish)(4)
yellow (neutral or sideways)(3)
single red (bearish)(2)
double red (very bearish)(1)

Here is my futures markets Trend Zone as of Friday’s close. The overall temperature made a slight shift back towards the bullish side after one week in the neutral zone. We went from 15 markets sporting a 4 or 5 on the spectrum back up to 21. The biggest mover week to week was Coffee (KC). It moved down 3 slots from double green (very bullish) to red (bearish). This could be the start of a trend change. The metals showed the biggest change as a group with GC, SI, and PL moving up two slots from bearish/neutral bias to bullish bias. The other two markets making a similar move were JY and RB.

Double_GreenSingle_GreenYellowSingle_RedDouble_Red
Very_Bullish (5)Bullish (4)Neutral (3)Bearish (2)Very_Bearish (1)
@AD@EC@CD@BP@HO
@BO@FV@YM@CL
@C@GC@FC@ES
@CC@W@LC@NG
@HG@JY@DX@NQ
@LH@NE1@SB@RTY
@MP1@PL@US
@S@RB@KC
@SI@SF@OJ
@SM@TY
@CT
1011691
27.03%29.73%16.22%24.32%2.70%

Is Gold Ready for a Breakout?

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Gold made a bearish engulfing candle on August 7th, which was followed by a severe 3 day sell off. Gold has traded in a sideways range ever since and is forming a symmetrical triangle pattern. The size of the potential breakout is equal the the size of triangle pattern from point 2 to the bottom of the range, which is roughly 140.60 points. We take this distance and apply it the the point it breaks either the downward sloping trend line for an upside breakout or to the the point it breaks the upward sloping trend line for a downside breakout. We would need a close above/below the trend lines for the pattern to be valid. Also, the breakout needs to occur before 9/25, otherwise it gets to far into the apex of triangle. This lowers the probability of the pattern. The big question is whether it breaks to the upside or the downside?

Case for the upside:

  • It has found support at the 50 DMA (yellow) during this consolidation, which is bullish.
  • It has found support inside the 34 EMA wave during this consolidation, which is bullish.
  • It has 8:13:21 EMA alignment, which is bullish.
  • The trend before this consolidation was bullish, which increases the probability of a continuation pattern.

Case for the downside:

  • October is traditionally a seasonal weak period.
  • The lackluster response to the recent FOMC meeting.
  • The most recent benchmark candle, from 8/11, is bearish and acting as stiff resistance.

Conclusion:

Gold looks poised for a breakout and I think the probability favors the upside. This market still has directional bias the the upside. However, let the pattern decide which direction. Whichever way it does go, it should offer a chance to re-enter on a pullback. Options might be a good play here.

Futures Markets Trend Zone EOW 9/11/20

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I look for pullback trade set-ups in trending markets and one helpful tool I use is my trend map. I follow 37 markets and break down each market into 5 categories:

double green (very bullish)(5)
single green (bullish)(4)
yellow (neutral or sideways)(3)
single red (bearish)(2)
double red (very bearish)(1)

Here is my futures markets Trend Zone as of Friday’s close. The overall temperature made a major shift this week towards neutral. We went from 24 markets sporting a 4 or 5 on the spectrum down to 15. This is now a 4 week decline in total bullish markets. Neutral went from 4 to 9, while total bearishness went from 9 to 13. The biggest mover week to week was the British Pound (BP). It moved down 3 slots from double green (very bullish) to red (bearish). This could be the start of a trend change. The following markets moved down 2 slots from bullish bias to neutral or bearish bias: CD, EC, ES, DX, NG, NQ, SF, SI, YM, and RB.

Double_GreenSingle_GreenYellowSingle_RedDouble_Red
Very_Bullish (5)Bullish (4)Neutral (3)Bearish (2)Very_Bearish (1)
@AD@FV@CD@BP@HO
@BO@NE1@EC@CL
@C@TY@ES@FC
@CC@W@DX@RTY
@HG@CT@NG@GC
@KC@NQ@US
@LH@SF@JY
@MP1@SI@LC
@S@YM@PL
@SM@RB
@OJ
@SB
1059121
27.03%13.51%24.32%32.43%2.70%

**Symbols above from Tradestation**