Daily Archives: December 5, 2016

EUR/USD Nearing Critical Support

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As the EUR/USD Forex pair continues its rather steep decent during the past couple of months, it is approaching a critical major support level around 1.04, as shown on the Weekly chart below.

Not only will a drop to that level form a potential triple bottom pattern, it will also hit a triple confluence of long-term price, trendline and regression channel “mean” major support.

A drop and hold below 1.04 could see a catastrophic price plunge to levels (0.8827) not seen since October 2000. We may, however, see price overshoot and drop below 1.04 briefly, before a potential bounce occurs.

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GDX vs. SPY: Accumulation vs. Distribution

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So far today, both GLD (Gold ETF) & GDX (Gold Miners ETF) gapped down & continued lower but have since recouped all of their post-opening losses & then some while the equity markets gapped up, rallied from there but topped out shortly after & have since been moving lower… essentially a near inverse mirror between the price action in the PMs & equities so far today. Should the current trends (stocks moving lower while gold & GDX rally) continue into the close today, that would indicate distribution in equities (sellers stepping in to sell the rallies) in equities & accumulation (buyers stepping in to buy the dips) in precious metals.

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Tech Top Tantrum

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Nothing can break this market, can it? Under the surface, though, some sectors are certainly weaker than others. NASDAQ stocks (the likes of AMZN, FB, AAPL) didn’t enjoy the Trump rally quite to the same degree as true industrial companies, but today’s rally is worth noting if you examine where prices are relative to the Thanksgiving peak. I covered AMZN early today to take profits, but I’m sticking with FB and just shorted AAPL. If things start to slip again, I think tech stocks will lead the way.

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Gravy In The Gap

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‘Gravy In the Gap’ is a day where the real action took place overnight and the day that followed is relatively muted. We could see an interesting day on equity indices today but it seems unlikely to be as interesting as the action overnight, unless we see a trend down day, that on the setup I’m seeing here would be surprising.

I said on Friday morning that it was possible that ES was evolving into a larger decline pattern, but that I was leaning against it. It did evolve into a larger pattern which was a falling channel and I posted that for subscribers at theartofchart.net on Saturday and we were looking for at least some more downside in the public Chart Chat yesterday. ES went a bit lower last night to 2179, two ticks above my lower double top target at 2178.5. The channel broke up later on and the next obvious target is a retest of 2214, with support at the weekly pivot at 2196.25. ES Dec 60min chart: (more…)

About-Face!

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I was more than a little surprised to glance at my iPad at 4 in the morning and see that the entire Euro-Plunge had reversed. As the quote on ZH puts it, “After Brexit, it took three days for markets to shake it off, with Trump it took three hours, with Italy it took three minutes.” So here I am banging out a quick post.

As stated in my Sunday post, “I had thought – – erroneously, it seems – – that we might get a bit of a bounce” – – well, I guess it wasn’t so erroneous. I’ve got a big short position on the UUP, so maybe that’ll work out after all. To be clear, my long-term view on the Euro is unchanged (which calls for weakness down to parity). At the moment, though, it seems that everything is green, with the exception, of course, being gold………..guaranteed by federal statute to fall every day no matter what the markets are doing.

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