• 1 hour Ford CEO Gets Raise After Massive Layoff Round
  • 17 hours Germany’s Flirtation With Recession Could Cripple The Global Economy
  • 23 hours Where To Look As Gold Miners Inch Higher
  • 2 days Google Faces Billions In Fines From European Regulators
  • 2 days The Energy Industry Has A Millennial Problem
  • 3 days Russian Banks Scramble For Sanction Loopholes
  • 3 days Gold ETFs Take A Hit After Four-Month Run
  • 4 days European Union Takes Aim At Ten New Tax Havens
  • 4 days Goldman Defends Trillion-Dollar Corporate Buyback Spree
  • 4 days $600 Billion At Risk As Boeing Fallout Continues
  • 4 days Venezuela Has Yet Another Crisis Developing
  • 5 days Wells Fargo Accused Of “Ongoing Lawlessness”
  • 5 days Hollywood Agency Returns $400M Investment To Saudi Wealth Fund
  • 5 days Why Twitter's CEO Is Backing A New Bitcoin Boom
  • 5 days U.S. Treasury To Employ “Extraordinary Measures” To Fend Off Default
  • 6 days Lobster, Golf Carts And Fidget Spinners: What’s In The Federal Budget?
  • 6 days Italy Launches New Welfare Experiment
  • 6 days There Is No Catch-All Solution To Climate Change
  • 6 days Is Now The Right TIme To Invest In Gold?
  • 7 days The Kremlin Moves To Control The Internet
Lending: The Good, Bad, And Ugly

Lending: The Good, Bad, And Ugly

Aristotle said, “The most hated…

The Chatroom Cartel Running Global Bond Markets

The Chatroom Cartel Running Global Bond Markets

Eight major banks have been…

  1. Home
  2. Markets
  3. Other

Market Report: All Eyes on The Prize

DOW

In my last article I was looking for new highs on the DOW, well we finally got that now, so with the DOW finally making a new high it's at least potentially completed the ending diagonal idea I have been working from the Oct 2014 lows. The only issue I see is the decline from the last peak is a messy move and not that impulsive, so see a retest of the all time highs would not surprise me.

DOW Daily Chart
Larger Image

However with or without a new all time high it does not detract from the fact that the wedge shape supports the idea of an ending diagonal. If the idea is correct then once it's complete we should see a strong decline. I suspect it would mark the end to a larger 3rd wave that started from the March 2009 lows (alt idea is ending wave C). Regardless of the larger time frame, if the rally from the Oct 2011 lows is close to ending and completing a large 5 wave advance, then I would initially target the Oct 2014 lows, that being the origin of the ending diagonal. So whist it may see a bit more chop to the upside, I still favor a strong reversal once it's complete. I am no longer bullish now. It would need a move above 18800 to suggest the idea is wrong.

DOW Weekly Chart
Larger Image


DXY

In that same article I mentioned that I was looking for a low on the US$ and expecting a large rally higher. That idea turned out really well, although I am still bullish there is the possibility that this is a corrective bounce. If the rally remains as a 3 wave bounce, it could well be part of a move that suggests a high is in place (as shown by the blue labeling) and setting up for a move lower. I would need to see a strong break under 95.50 to start to consider bearish options, staying above 96.50 supports the primary idea and rally back to test the 101 area for wave 5 and complete a much larger 5 wave rally from the May 2014 lows.

DXY Chart
Larger Image


Gold

So as the US$ moves higher it should pressure Gold to move lower and finally hit our long standing target around $1100-1120, I still think this is lacking a few final touches and would like to see a new low under $1131.

Gold Chart
Larger Image

In a prior article I mentioned the idea we were still looking for $1250 to end wave [b], well I can't say it won't test $1250, but the odds likely support the idea wave [b] is probably complete, so we still want to see wave [c] of wave 5 and target sub $1131.


VIX

We finally got the new low I expected to see, that also aligned with the new high on the SPX and a nice reversal on both markets. However as the decline on the US markets is a bit sloppy, we may see a retest of the support band on the VIX, either way I think the VIX is a strong buy if a retest was seen, as the SPX moves lower we should see the VIX move higher. Both the VIX and the SPX support an ending diagonal pattern which is a reversal pattern.

VIX Chart
Larger Image

Until next time,
Have a profitable week ahead.

 

Back to homepage

Leave a comment

Leave a comment