A mixed bag tonight.
Let’s start with the S&P.
As expected we took out the 741 (basis cash) low on a day that had normal range and volume. However, we did not see at least 50% of the body of the candlestick below 741 (basis cash); so the jury is still out. We did see a trend day develop after 11:00 am EST yesterday.
Market Delta shows the volume at the low to be moderate rather than low. For this reason, I expect to see the low at 740 (basis March) to be breached tonight. There is resistance at 752 and 756 to 758. Acceptance above 758 would be more evidence of a tradeable low; another trend day down would be a strong indication of a downside breakout. I exited the remaining second third of my shorts at 744. The stop on the last third is now at breakeven.
Figure 1 is a chart of the 18-day and 5-day swings.
Gold
Gold is in the 13-week (quarterly trend) Primary Sell Zone (Figure 2). On February we had a strong day up into the zone. Then we had an inside day. For the up-move to remain on-track, I would prefer not to see a strong directional day down. Such a move would suggest the 13-week is forming a sideways pattern bounded by the zones:
- Primary Sell Zone: 1040 to 993
- Primary Buy Zone: 660 to 714
Figure 3 is a daily Gold chart.
DX (US$ Futures)
We may have the start of a possible 18-day Normal Change in Trend:
- We had a cyclical high due on February 17 +/- a day.
- The price action of the 20th generated a sell signal.
- We are in a 13-week Primary Sell Zone.
Prices need to stay below 92.50 (basis CSI Perpetual) for the possible 12-month downtrend to remain intact. There is a positive spread of about 9 to 10 points basis March. At this moment, the key level in March would be 92.60. Figure 4 is a daily DX chart and Figure 5 the DX monthly chart.
Figure 1 Daily S&P
Figure 2 13-week Gold
Figure 3 Daily Gold
Figure 4 Monthly DX
Figure 5 Daily DX
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