September futures reached a high of 7510 yesterday, which was just inside the lower end of my resistance zone. There's bearish action showing up on the 240M chart, which indicates lower price action. The first downside support zone is between 7350 and 7296. Inside this zone there's the monthly R1, the 100 DMA, the 34 EMA H, along with four Fib symmetry projections. If price action reaches this zone and it holds, then I will look for more clues as to which way prices will go.
The Dollar Index has been in a down trend since topping out on March 19th. Since then, this market has made 3 significant measured moves (MM). The first MM, which is the dominant one, had a neutral retracement. This indicates the start of a strong down trend. However, it had significant left-handed skewing. The skewing is an indicator of momentum and a ratio of 5:38 is extremely weak. This puts a damper on the bearish retracement.
The next 2 MM's were located inside the dominant one. They both had deep retracements, which signals a weakening down trend. The 2nd MM also had extreme left-handed skewing with ratio of 8:23. All together this shows a down trend that is weakening and looking for a bottom. We can use extreme fib extensions to create a possible support zone. Utilizing the fib extensions of the dominant MM and it's two supporting MM's, I have created the first area to watch for a low. It's between 95.38 and 92.54. If the market trades inside this zone, then I will look for more clues to a possible bottom. If the market does bottom inside this zone, then I would expect a significant bounce higher.
The Canadian Dollar has been rising since it's March 19th low. Since that time it has made four measured moves (MM).
The dominant MM had a neutral retracement with extreme 6:24 left-handed skewing.
The 2nd MM had deep retracement with 5:12 left-handed skewing.
The 3rd MM had deep retracement with 4:3 right-handed skewing.
The 4th MM had shallow retracement with 3:1 right-handed skewing.
These MM retracements and skewing can give us some insight on the strength of the up trend. Strong trends have neutral or shallow retracements with right-handed skewing. Weak trends have medium deep or worse retracements with left-handed skewing. This up trend started with a neutral retracement, which is strong. However, it had left-handed skewing with a 1:4 ratio. This shows weak momentum. The next two MM's had deep retracements, which signals a weakening up trend. It's not surprising giving the skewing on the dominant MM. Finally, the final MM showed some strength with a bullish retracement and bullish skewing. This helped push the market higher on the 26th of May, creating the breakout candle of the dominant MM. Now that we know how this market has rallied, we can determine possible resistance using Fib clusters of the four MM's.
The first major area of potential resistance I see is between 74875 and 76146. This area contains the dominant MM's 261 extension, the 2nd MM's 261 extension, the 3rd MM's 361 extension, and the 4th MM's 461 extension. In addition to these fib clusters, we have the 78.60 retracement level of the 12-31-19 high and the 3-19-20 low and the YTD POC level @ 7528. Finally, we have a VSCORE approaching it's mean. All these together should create significant upside resistance. If prices reach this zone and stall out, then I would expect a correction back down to a least 72245. This is the swing high of the dominant MM. I will continue to monitor this market as it approaches my resistance zone and give more updates if warranted.
Natural Gas may be forming a double bottom pattern. We need a close above 1.847 for confirmation. Upside target would be around 2.081. This market has been in a strong down trend since its 11-5-2019 high. So what exactly supports this double bottom pattern?
First, large traders are holding long positions in the 4+ years extreme range. Small traders have recently been selling their extreme long positions. Both are bullish.
Second, prices found support inside my fib cluster zone near the 361 combo.
Third, there is bullish divergence on the RSI.
Fourth, a bullish engulfing pattern formed yesterday.
Fifth, there is a seasonal bias for a mid-February to late April rally.
Finally, the lows found support from levels seen during 1999 and 2016 bottoms.
Next, if prices can indeed rally, then how high can they go?
First upside resistance zone is between 1.925 and 1.994. This area contains a falling window pattern, monthly R1, and the 50 DMA. If we can breach this zone AND take out the 2.025 level, then we will take out another swing high. This will reverse the bearish pattern of making lower highs and lower lows. This would put our 2.081 target within reach. Once met, then we could see prices make a run at the volume at price resistance zone between 2.246 and 2.318.
Back on January 28th, I wrote about a possible top forming in Platinum. My conclusion, which was "the chart is starting to support a bigger correction", proved to be true. This market has made a deep pullback and is now approaching the 78% retracement of the 8-16-2018 low and the 1-16-2020 high at 819.70. This level is inside a possible support zone between 846.40 and 803.00. I would expect some sideways action inside this area before attempting a rally. This market has already hit an upside resistance zone between 912.90 and 922.80. One of these two areas will need to be taken out for this market to make it's next big move.