S&P 500: Exhausted?

Last month I shared with you my concern about the possible reversal of the index in spite of the solid gain booked earlier. The chart of the S&P 500 spoke for itself, showing a weakness in the structure of the move up. The angle of the uptrend was too gentle to sustain. And the finishing punch came from the RSI indicator, which had an invisible Bearish Divergence on its chart.

We never know what the future will bring us, although this time the geometry of the double resistance worked just perfect as I assumed another spike to that area of $2860 before a reversal in my earlier post. Bingo! The index peaked right in that area at the $2863 and then collapsed. This is further proof of the magic power of the trends.

Chart: S&P 500 Daily: Watch Support After The Failure At The Resistance

SP 500 Exhausted
Chart courtesy of tradingview.com

This is an updated chart above, which reflects the market changes and shows the outlook of the possible upcoming behavior of the S&P 500. Continue reading "S&P 500: Exhausted?"

S&P 500: Not A Rocket!

Back in May, I posted the alert about the upcoming rally of the index in case of the breakup of the triangular consolidation. Indeed, the S&P 500 already booked more than a 100 points gain from that day ($2679) but what I see in the chart now is not inspiring me these days.

Below is the new daily chart where I made the annotations to express my concerns.

S&P 500 Daily Chart: The Index Loses Steam Within A Possible Large Complex Correction

S&P 500 Daily Chart
Chart courtesy of tradingview.com

First of all, let me tell you why I gave the title “Not A Rocket” to this post. Usually, a good rally has a sharp angle of the trend, and anyone could easily identify it with the naked eye. This is what I was looking forward to giving the title for the earlier post using the proverbial phrase “Fasten Your Seatbelts.” Continue reading "S&P 500: Not A Rocket!"

Copper To Retest $1.94 After Breaking Support

Last September I posted a monthly chart of Copper futures to warn you that the metal has been approaching the area of strong multi-year resistance. In that very same post, I set specific triggers to watch for further price action.

Recently, one of those triggers was broken, and now it’s time to update the chart.

Chart. Copper Futures Monthly: Crucial Support Was Broken

Chart courtesy of tradingview.com

The global chart structure hasn’t changed, and I posted its full reconstruction adding some new annotations to highlight the most recent price action. Continue reading "Copper To Retest $1.94 After Breaking Support"

Pendulum Swing No.5: Back To Success!

It’s time to announce the result of the 5th Pendulum swing pushed this January. In that race, I put heating oil (ultimate futures winner in the second half of 2017) vs. wheat futures (the top loser). The Pendulum effect favored the top loser, i.e., wheat to beat heating oil in the six month period. The image below contains the poll results of your voting for that experiment.

Image 1. Poll results

CBOE Volatility Index (VIX)
Chart courtesy of INO.com

Bingo! The majority of you guessed right choosing wheat as a winner and as you can see in the next chart that wheat has gained +17.56% as heating oil gained only +6.76. I would like to express my gratitude to those who chose the experiment success option for your trust! So after the first failure in the second half of 2017 (4th swing), the Pendulum experiment is back on a winning track! Let’s try it again and see what happens.

Chart 1. Half Year Futures Performance (First Half of 2018)

CBOE Volatility Index (VIX)
Chart courtesy of finviz.com

This time we will have an interesting race as the winner in the first half of 2018 is not a commodity, but the CBOE Volatility Index (VIX) also known as the stock market fear gauge. It gained more than 40%, leaving its rivals far behind amid the roller-coaster ride in the S&P 500.

On the other side, which is red, there is the biggest loser, sugar with an almost 20% loss in the first half of 2018. The supply glut in the sugar market undermined the price for this commodity significantly. Continue reading "Pendulum Swing No.5: Back To Success!"

Does Oil Hold The Key To The Canadian Dollar

Aibek Burabayev - INO.com Contributor - Metals - Canadian Dollar

At the end of last month, I called for a substantial upcoming weakness in crude oil as the market could have finished the long-lasting consolidation after the earlier crash from 100+ levels. Indeed, oil lost almost $4 from that time and now is rebounding as markets naturally move in zigzags.

Oil-related currencies also suffer, and in this post, I would like to share with you an exciting chart setup with tremendous profit potential for one of such currency, the Canadian Dollar (CAD) also known as “Loonie” among traders.

Before that, I built a chart to demonstrate the correlation between WTI crude oil and the Canadian Dollar.

Chart 1. WTI futures Vs. Canadian dollar futures: Perfect Correlation

Canadian Dollar
Chart courtesy of tradingview.com

In the chart above the WTI futures graph is black on the right scale and the Canadian Dollar futures graph (in US$ per 1 CAD) is red on the left scale. I didn’t add any annotations on the chart as you can clearly see that the correlation is just perfect and the most important fact is that the crucial market phases like strong moves and consolidations coincide in time. The Canadian Dollar tends to overshoot WTI amid market strength, but it is quite moderate during market weakness. Continue reading "Does Oil Hold The Key To The Canadian Dollar"