Author Archives: MPTrader

Key Level on the 10-Year

By -

By Mike Paulenoff, MPTrader.com

After the first day of trading of April, a relatively uneventful one for the equity markets in general, the most consequential market for me is 10-year yield, which continues to exhibit constant weakness that commenced immediately after the March 15th Fed rate hike, and currently is bearing down on a critical 5-month support level at 2.30%.

If 2.30% is violated and sustained, it will trigger potential for downside continuation that projects to 2.10% optimally, and possibly to 2.00% prior to the next upmove in the budding yield bull market off of the July 2016 historic low at 1.32%. The 10-year hit a high in mid-December, 2016 at 2.64%, and probed that level a second time into the March 15th, 2017 Fed meeting. (more…)

Oil Chart Withstands Huge Inventory Builds

By -

It is remarkable that crude oil has managed to hold its Jan-Feb coil support line in the aftermath of two huge builds in the inventory data. That said, however, I keep thinking that Saudi Arabia (and OPEC) are under the market on every $2-$3 decline to preserve the integrity of “The Agreement” and also to support prices into the Saudi-Aramco public offering later this year.

Whether or not there is any truth to my suspicions, the fact remains that for the time being, the high-level coil-digestion formation remains intact and viable, and as long as that is the case, the overall set-up in oil is bullish and in a holding pattern awaiting upside continuation to $56.00 and then to $61.00. Only a reversal and break below $51.22-$50.71 support will wreck the set-up.

full-Y6k2FREnavva6i1MvumSeOriginally published on MPTrader.com.

NFP Report and Dodd-Frank Repeal Propel Banks Stocks (XLF) Higher

By -

The combined impact of a better-than-expected non-farm payroll gains and the prospect of a Trump repeal of Dodd-Frank financial regulations goosed the Financial Select Sector SPDR Fund (XLF) +1.3% in early trading.

That said, let’s notice on the enclosed near-term Point & Figure chart, that current strength is pushing up towards a test of very powerful resistance at a quadruple high-print of 23.80.

A climb to a 23.90 print will trigger a new buy signal that will project to new high targets of 24.60 and 25.20. Only a print of 23.00 will compromise the constructive P&F set-up.

full-M08GplEbadooGFweJLS3f

Originally published on MPTrader.com.

10-Year Yield Transitioning Out of Multi-Year Bear Market

By -

My intermediate and longer term technical set-up work on 10-year US Treasury yield argues that benchmark yield is in transition from a 35-year bear Market (dominant downtrend) into a multi-year bull market (dominant uptrend).

From 1981, when 10-year yield peaked at 15.84% amid concerns about rampant, uncontainable inflation and stagnant growth (“stagflation”) precipitated initially by the 1973 OPEC oil embargo, benchmark yield steadily and relentlessly declined to a post-financial-crisis 2016 low at 1.32% (see Charts 1 and 2).

From a technical perspective, I can make the case that all of the action in yield from mid-2011 into early 2017—a 5-1/2 year period– represents a major base formation at the conclusion of a generational yield bear market (see shaded area on Chart 1). That said, to confirm the end of the 5-1/2 year transition from bear to bull market, yield must climb and sustain above significant resistance lodged between 2.75% and 3.30%. Yield currently is circling 2.50%.

(more…)

US Dollar in Early Correction Phase?

By -

The U.S. Dollar Index (DXY) has violated its “Dec 14 FOMC low” at 100.73, and is in route to probe important support at its prior two major 2015 peaks at 100.47 (Dec 3, 2015) and at 100.39 (Mar 13, 2015).  If these levels are violated and sustained, this will argue for a deeper correction into the 99.00-98.40 area as a next immediate target zone.

Let’s notice the glaring weekly momentum divergence at the 2017 high compared with the price momentum confirmation that occurred at the March 2015 high.

The juxtaposition of the intermediate-term momentum gauges with the unconfirmed new-high price action is a powerful warning that the USD could be in the early phase of a major correction of its May 2011 to Jan 2017 Bull Market.

Mike Paulenoff is founder of MPTrader.com, where he provides live intraday analysis and trade alerts covering the equity, commodity, and currency markets.

Patterns & Cycles Pointing to SPX 2300 by Month End

By -

By Mike Paulenoff, MPTrader.com

Since I am a “pattern geek,” what is the Emini S&P 500 pattern whispering to us now? That all of the action off of the new all-time high at 2278.25 established on December 13 — exactly one month ago — is taking the form of a Bullish Coil Formation, which the vast majority of the time represents a digestion period prior to continuation in the direction of the underlying trend (up).

If such a scenario unfolds from the month-long formation, then as long as any weakness is contained above 2248.50, ES should take off to the upside, heading for a target zone of 2300/10. (more…)