SPX:
JCS - Huge engulfing candle on the weekly chart......nuff said.
TL-S/R - SPX broke and back-tested a major multi-year supporting trend-line, and is now following through on that bearish action. A sloping multi-year trend-line support is now below at roughly 1090,
Lat-S/R - 1150 and 1130 may provide some strong support and is basically the center of the 'B' wave correction in mid- '10
Fibos - From the '09 bottom to the May '11 top, the 38.2% fibo support comes in at 1103.
EW/Patterns - An obvious HnS pattern has broke it's neckline at 1260, this pattern suggests a target of 1142. Almost there now. The larger multi-year EW pattern suggests that this move down is just the first of many more, a prolonged sell-off for the next 3-4 years could see the SPX at the 400-500 level as a measured move. The MT count suggests this deep move down is a third wave, a 4th wave bounce may happen soon, then a lower-low for the 5th, likely into a target zone of 1130 to 1150. The end of the first wave down is at 1297, so a forth wave bounce needs to stay below that level for an accurate interpretation.
MAs - The 50DMA is headed down toward the 200DMA, I fully expect a bearish cross-over soon. The 10 EMA is likely resistance for any significant bounce in the ST, currently above at 1259 and descending fast.
Osc - MACD clearly wide open a bearish to the downside. RSI deep into oversold territory. I suspect a bounce soon will set up an eventual +ve divergence in the RSI with the following lower-low thereafter.
BBs - Price action operating below the lower BB, this condition will not likley last more than a few days, this is the second day. When the market does this, it's a clear sign of frenzied panic in the market.
Volume - The weekly volume has not even approached '10 flash crash levels yet. I think this suggests that more selling will come eventually. This move down has been far more organized than the '10 flash crash.
I suspect that the FED will formally announce another easing plan before this month of Aug is over which will likely produce a dead-cat bounce into Sept as a lower-high.
Putting it together - While the SPX continues below the 10EMA, I suspect that the index may give a bounce soon, but would be sold down to the 1130 to 1150 area, with an off chance of hitting the 38.2% fibo at 1103.
Palladium:
I'm not going in depth, but I need to point out a bearish pattern. If you look at the daily chart you will see a rising wedge in the form of what could be an ending diagonal moving up to a double top. It is entirely possible that we are seeing a truncated 5th wave in this market. A key trend line support exists at 632 and rising. Lower weekly BB support at 697, so far since the run up from the '08 low, palladium has not closed a week below the lower BB, An intra-week incursion is ok, but bulls would want to see the week close above that level. The 38.2% fibo has helped as support (679). Bulls would want to see a second challenge of that support also succeed.
Silver:
JCS - an OKR on the daily that engulfed most of the price action in the past 2 weeks. Bearish while under 42.25. However, if Silver manages to take out 42.25 soon, the sling shot effect could easily launch silver up to 44-46. The weekly chart suggests a close of the week today below 39.72 would be bearish, possibly producing a bearish inverted red hammer. Such a move would likely see next week with lower prices.
TL-S/R - Price broke a ST trend-line support at 39.85 yesterday, that line may now pose resistance above at 40.16. MT TL support is below at 36.30 today.
L-S/R - ST support zone between 38.77 and 37.84 being tested now. MT support zone between 33.45 and 35.10. Overhead resistance between 44.60 and 46.05.
Fibos - The 38.2% was broken at 38.85. The 50% is at 37.80 and 61.8% at 36.76
EW/Patterns - The impulse pattern up from 33.37 was technically completed yesterday, for further MT Bullish behavior you would want to see a choppy 3 wave series develop, preferably above the 61.8% fibo retrace level of 36.76. Any impulsive sharp moves down to below 36.76 at this time puts the MT bull trend in jeopardy. There still remains a possibility that silver could move below 33.37 to challenge sub-30 levels.
MAs - Price closed yesterday below the 10EMA and 20 DMA, very bearish. Another daily close today below the 20DMA and the 3/10/20 ribbon will be in a potential MT bearish alignment. The daily close would need to move back above the 10 EMA (39.72) to keep the MT trend positive, currently it is in jeopardy.
Osc - MACD went negative on the daily.
BBs - lower BB support is at 36.62 To stay bullish, you would want to see PoS bounce off the lower BB and consolidate sideways, producing another 'pinch' in the bands, a coil if you will that could stage the next leg higher. If PoS closes at or below the lower BB and starts to push the band lower, it's a bearish sign.
Putting it together - ST support exists between 37.80 to 38.77. A break of this support may invite a move to secondary support at 36.30 and 36.76. Moving back above 42.25 at this time would be very bullish.
Mornin' all,
I Thought I'd take some time and show you some of the tools in my tool box that I use on a daily basis to gage the markets:
Japanese Candle Sticks (JCS) - Has some predictive qualities, but not good at suggesting targets.
Trend Line-Support/Resistance (TL - S/R) - Gives an idea of where other trader's stops and limits are, for potential break ups or downs.
Lateral-S/R (L-S/R) - Also gives an idea of where other trader's stops and limits are, for potential break ups or downs.
Fibonacci retrace levels (Fibos)- Gives points of Support or Resistance.
Elliot Waves and Patterns (EW/Patterns) - EW, CnH, HnS, iHnS, Flags, Wedges, ect. Has some predictive qualities and suggests some points of Support and Resistance.
Moving Averages (MAs) - Provides levels of Support or Resistance.
Oscillators (Osc) - RSI, MACD, Williams%, Stochs ect. Provides a small degree of prediction and market sentiment (oversold, overbought).
Bollinger Bands (BBs) - Provides levels of Support and Resistance, a small degree of prediction with a few tricks.
Gold:
JCS - Posted an OKR (Outside Key Reversal) on the daily, Bearish while below 1682
TL-S/R - ST supporting line below at 1633
L-S/R - Not much of any while in new price territory, the May high at 1575 might provide some support
Fibos - the 23.6% is at 1633, the 38.2% at 1603
EW/Patterns - Still in an acceleration channel while above 1633. The wave up from 1478 does not look complete to the upside. But any move below 1606 would certainly change the picture to one more bearish.
MAs - The 10EMA is below at 1632, The 20DMA at 1609
Osc - The daily MACD is open to the upside (bullish) But a flat -ve divergence is starting to build between tops.
BBs - 3 frothy intra-day spikes above the daily upper BB, This often suggests a top could be forming. When gold closes outside the upper BB or has deep spikes above it, Gold often turns for the ST at least.
Putting it together - ST support can clearly be seen at about 1632 to 1633 today, secondary support comes in at about 1603 to 1609. While below 1682, further corrective action is likely.
I will post this now, but will continue to update this blog post through the morning as I analyze other markets.
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