Technical data suggests that when the Fed lowers rates, markets begin to trend lower. This seems to be developing in general as traders lower their long exposure to the markets. Yesterday, I noticed that high flying stocks faded a bit more than the broad indices – suggesting to me elements of profit taking and adding more cash to their coffers. Stock pickers continue to excel with selective stocks performing in spite of those. Paper currencies continue to lose ground as more traders pile into gold with another big move overnight. In a dangerous zone, China moves more armed forces into Hong Kong. In short, lots of reasons to find volatile trading backdrops. Be careful and realize that markets are not trending – move the telescope out wider so you can understand the bigger backdrop.
The e-mini S&P, though off its highs, is holding below 2900. The mini Nasdaq is below 7557, a lower support of importance. The mini DOW traders have faded us below 26028 and looks as weak as the other charts. Markets are settling into a lower range once more BUT traders remain very skittish. Ranges could easily break, accelerate away and then return.
|COMMODITY & CURRENCY WATCH|
Gold broke resistance and with buyers coming in at each dip below, the chart is clearly in a breakaway. Currency moves continue at the forefront of the markets for another week and over the coming months. The USD index now holds very familiar channel support near 97.3 to 97.5 remaining resilient to other currency movement. WTI is holding 54 and back into heavy congestion. Holding 52 is now the floor in the near term.
Ranges intraday widen and as cross currents continue, we hold levels between 2861 and 2900. The mini Nasdaq is battling in the range between 7508 to 7667. The mini DOW is battling support near 25748 with resistance sitting near 26089. Continue to be careful here on the edges of your charts as we could accelerate out and continue if traders get too heavy on the edges, in which case, you’ll have to reverse your position. Whipsaw is likely over time.
|OVERALL WIDE ANGLE |
Divergent action still sits below the movement of price on both sides of the trades – long and short – but traders are still looking at deep support edges to bounce – see the weekly charts for this confirmation. Weekly charts are showing flattening momentum and some more downside weakness that that must be confirmed
|METASTOCK SWING SHORT – A NEW ENTRY AT THE FAILED TEST OF 2912 WITH A 10 POINT STOP ENGAGED AT THE SECOND FAILURE OF 2912 ON FRIDAY.|
|TARGETS -major target hit again 2881 and heading to the expansion level near 2874 during the trading hours –|
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