Category Archives: Fibonacci

Catch a Clue

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My disinterest in the markets is reaching nearly unprecedented levels. Perhaps it’s foolish for a person whose livelihood is based on market analysis to make such a declaration, but I have a reputation for honesty, and I might as well adhere to that. The markets are annoying, tiresome, and have a completely “captured” feel to them.

Indeed, I got up at my usual time (4;45 a.m.), did my typical morning prep, took my dogs on a long walk, came home……….and went back to bed. It’s hard to overstate how weird that is for me to do that. It’s akin to Hillary Clinton deciding to return all her ill-gotten speaking fees even though she found some lovely dresses in a “petite” size that she’d love to buy since they make her look so sensational. It simply doesn’t happen. But it did today. I even stayed in bed for the first half hour of the trading day. It was actually kind of glorious.

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Next Floor Down

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So even though charts are totally without merit, technical analysis is a hare-brained fantasy, and Fibonaccis are a joke (at least according to the upstanding citizens who swing by Slope for time to time for no other purpose to pee on my raison d’etre) , I wanted to follow up on my post from last night. Because of a loving, merciful God, crude is, in fact, falling to pieces, down about 4.2% as I am typing these words, completely in line with what Fibonacci (and my trendline, shown in green) predicted:

0713-crude

The blue tint is the Fib level, and it must be broken for the next phase to begin. If it does, we can look forward to the green tint as the drop zone, with about $42.25 as our next target.

Of course, that’s only if you believe this nonsense.

Retracements for Crude

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As much flak as I’ve taken about Fibonacci studies, it only eggs me on to show them more.

I’ve been quite hung up on crude oil for months now, and it dawned on me this afternoon to try dropping a retracement pattern on top of it. Sure enough, it opened my eyes up to some pretty important support and resistance levels. As you can see below, the lowest we got this week was nailed by one level (see yellow tint), and I’m looking/praying for firm resistance at the cyan tint. Should we sink on Wednesday, I’ll be watching the green tint just above $42 as the next target.

0712-crudefib

Flags

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ES didn’t quite make it to the double pivot support yesterday, though the low at 2066 was arguably a test of monthly pivot support at 2062.5, and might be close enough. Obviously the SPX daily middle band held as support at the close and the intraday low was at a test of the 50dma. Can we see more downside?

Maybe, though the obvious next move on the SPX daily chart points to a retest of the 2108 high, and on a sustained break above 2108, to megaphone resistance in the high 2120s, and that may well be the target for this move up from yesterday’s low. In effect that would be a test of the all time high at 2134. SPX daily chart:

160706C SPX Daily

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Testing the Daily Middle Band

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The tape was pretty uncertain yesterday and the flush at the close fixed 15min sell signals on RUT and NDX that had me very much wondering whether the rally had already topped out. Happily that wasn’t the case and both SPX and ES are now close to a test of the ideal rally target at the daily middle band, currently at 2072.5 on ES and 2079 on SPX. That doesn’t need to be tested exactly, the current AM high at 2075 at the time of writing would do just fine.

I would draw your attention to the possible IHS that has formed and broken up on the ES chart below. That’s still very much the lower probability option in my view, but it is very much still an option, and if the daily middle band fails to hold as resistance here then that would become the higher probability option, though the opening setup here strongly favors the bears in my view. ES Jun 60min chart:

160510 ES Jun 60min

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The Land that Pullbacks Forgot

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I’m in such a quandary about precious metals. On the other hand, SLV and GLD look fantastic long-term (and most of you have seen my silver chart, whose target seems completely plausible now, whereas a week ago it was just plain dumb). But, I gotta tell ya, looking at this gold/silver sector chart, the run-up in gold (tinted in cyan) seems like it could really use a breather!

0420-xau

What I’m focused on are those Fibonacci retracement levels, the most pertinent of which is highlighted above in green. We actually are pushing above it right now, but sheesh, it sure would feel better piling into gold if things would relax a little bit! The good news is that gold and silver seem to be giving a long-needed F.U. to the central bankers out there.

Yen Retracing

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Since Monday, hmmm were there any secret meetings that day…. The Yen has been falling.  I laid out a fib retrace and am expecting the Yen to hold support at the 50% line.  This is the new fuel for the rocket ship we call our stock market.  This is also causing the precious metals some grief (why I bought DUST), and oil to some extent, as well.  My belief is the Yen will renew its climb when our Fed does nothing in April, and no way in June with Brexit vote, on tap.  In the meantime keep your NUGT’s warm.

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