Record Week For Stock Market

Hello traders everywhere. The S&P 500 and DOW both traded at record highs for the second straight day this week being propelled by the energy sector as crude oil prices continue to trade above $70 a barrel. Of the two indexes, it's bigger news that the DOW finally hit a new high, it's first since January of this year when it's compatriates have been consistently making new highs this year.

The Dow has risen in eight of the past nine trading sessions, with the most recent gains putting the index up 2.2% for the week, its best weekly stretch since July 13.

Record Week Stock Market

The S&P 500 is posting a +1% gain on the week the NASDAQ will barely post a weekly gain checking in with +.10%. For the second straight week, gold is relatively unchanged for the week while crude oil had a great week posting a +3.4% gain.

The U.S. dollar continues to be in a sidelines mode with a red weekly Trade Triangle on the board and looking to post its second weekly loss in a row standing at -.70%. Bitcoin finally gave us the red weekly Trade Triangle that we've been waiting for only to bounce higher and finish the week with a +2.9%. However, expect more volatility in the near-term.

Key Levels To Watch Next Week:

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World Oil Supply, Demand And Price Outlook, September 2018

The Energy Information Administration released its Short-Term Energy Outlook for September, and it shows that OECD oil inventories likely bottomed in July at 2.804 billion barrels. It shows inventories rising in the third quarter, contrary to the usual seasonal trend. However, it forecasts that stocks will drop in December to 2.798 billion after the Iranian sanctions are expected to go into effect.

Throughout 2019, OECD inventories are generally expected to rise, ending the year with 72 million barrels more than at the end of 2017. The anticipated drop in Iranian production, due to the U.S. sanctions, is forecast to be offset by increases from other producers, such as the U.S., Canada and the Gulf states of Saudi Arabia, Kuwait and the UAE.

World Oil Supply

Saudi Arabia has recently stated that it can produce at least 12 million barrels per day. If it does increase output to that level, this would be a major “surprise” to world markets since its production has never exceeded 11 million. Continue reading "World Oil Supply, Demand And Price Outlook, September 2018"

DOW Shrugs Off Latest Round Of Tariffs

Hello traders everywhere. While the overall market is a bit mixed today the DOW continues to shine as it approaches its all-time high. As we stand in early afternoon trading the DOW is up +.75% on the day and only 175 points or so from hitting a new record high above 26,616.71. This move two-day move higher comes on the heels of a weak close last week and weak open on Monday as we waited for the latest round of tariffs against Chinese goods.

DOW continues to shine

Late Monday, President Trump announced that 10% tariffs on $200 billion in imports from China would go into effect next week, escalating the trade war between the world's two largest economies, but the key point was that there would be a slower escalation of the tariffs through the end of the year which will ultimately rise to 25%. China responded on Tuesday by unveiling 10% tariffs on about $60 billion of U.S. goods effective Sept. 24.

The beat goes on.

Key Levels To Watch This Week:

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Are Technology And FANG Stocks Bottoming?

Recent downside pricing pressure on Technology and FANG stocks have kept investors wary of jumping back into the market while we wait to see where the bottom may form. Concerns about long-term pricing pressures, US trade wars and the continued Congressional testimony regarding privacy and censorship issues have kept social media technology stocks in a negative perspective. The only aspect of this pricing pullback that is positive is that these stocks will, at some point, find a price bottom and attempt to rally as investors rush back into their favorites attempting to ride the run higher.

Our researchers believe the current price levels could be a prime example of a short-term bottom setting up in certain technology stocks. Both Apple and Amazon are two of the biggest and most actively traded stocks on the US Stock exchange. They differ from many of the other FANG stocks because these companies actually produce and sell consumer products & services that are, in many ways, essential to conducting commerce and trade.

This 30-minute chart of Apple shows our Adaptive Dynamic Learning Cycles price modeling system showing a cycle low is setting up over the next day or two in Apple followed by an upside price cycle that should push prices back above $220. Notice the oversold levels highlighted in BRIGHT GREEN. The last major oversold levels setup just below $218. The current oversold levels are setting up just below $217. We believe these $217 levels will likely set up a price bottom and prompt an upside price rally over the next 5+ days that could push Apple prices well above $225.

FANG Stocks

Amazon is setting up a different type of price bottoming formation – a Fibonacci price retracement bottom. We use these Fibonacci price retracement levels in conjunction with our other price modeling systems to attempt to determine where and when price reversals may be set up in the future. In this example, we can see a price bottom formed in early August of a Fibonacci 50% price pullback and the current price pullback is testing the same 50% level. We believe this current setup will prompt a price bottom to form and an upside price rally will likely result in AMZN rushing back above $2000 again with a few days. Continue reading "Are Technology And FANG Stocks Bottoming?"

Gold Struggles While Silver Doesn't

In this post, I will take a deep dive into the chart structure of the precious metals as prices approach crucial triggers but on the opposite sides of each metal.

Let’s start with gold as it struggles to gain a foothold above $1200.

Chart 1. Gold Daily: Pullback

Gold Struggles
Chart courtesy of tradingview.com

The votes were split almost evenly in the poll in my earlier post about the gold’s outlook. Half of the readers chose the trigger of the upside resistance at the $1218 and the rest thought that the market would drop to retest the $1122. The metal price then was just a little bit lower than these days at the $1186.

Almost one month has passed since then, and to my surprise, none of the triggers were pulled although we were very close to the $1218 point, the market couldn’t push above the $1214 at the end of the August and then retreated below $1200. This month we could see the increasing activity as investors are back from their summer holidays. There was another attempt to clear the resistance last week, but it stalled at the $1213 and the significant level again remained untouched. Continue reading "Gold Struggles While Silver Doesn't"