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DJI Potential Bearish Momentum | 15th September 2022On the H4, the price seems to be in a descending trend hence we're looking for a sell entry now at 31048.46. Take profit will be below the previous swing low at 29199.35 where there is an old support level. Stop loss will be at 32504.04, where the most recent swing high is. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
TVC:DJIShort
by Rockqet
4
Stocks Edge Higher Ahead of CPI DataStocks have edged higher, breaking through to our next target of 4122, exactly as we predicted yesterday. Stocks are up ahead of key US inflation data, expected to come in at 8.0% , which is still high, but hopefully at least plateauing. It looks like we are meeting some resistance as confirmed by red triangles accumulating on the KRI. The Kovach OBV is still strong but may be rounding off slightly. While we may be in for a retracement, if momentum can sustain, then 4144 or 4178 are reasonable targets. If we reject current levels watch 4068 for support.
FX:SPX500Long
by quantguy
DOW JONES invalidating bearish patterns, targeting 34000 again.The Dow Jones Index (DJI) closed yesterday above its 1D MA50 (blue trend-line) as it is extending the rebound we called on our previous analysis: As you see, that rebound came exactly on the Higher Lows trend-line that started on the June 17 Low and was the second (July 14 the first) time it held, making it the short-term Support. What Dow achieved with that 1D candle close above the 1D MA50, is to invalidate the February 24 - April 28 2022 fractal, which by that time was similar but failed to break and close above its 1D MA50 and eventually got sold aggressively. What makes the current rebound potentially having a long-term effect is 1) the 1D RSI rebound on its multi-year Oversold Zone and 2) the Bullish Cross on the 1D MACD, which within 2022 always delivers at least a +8% rebound. Such % rise would be the test of the 1D MA200 (orange trend-line), which is our medium-term target. As mentioned numerous times before, in order to commit to long-term buying we would like to see the index close above the 1D MA300 (yellow trend-line) first, which provided the rejection on the August 16 High. So far the medium-term trading strategy is to buy every pull-back on the Higher Lows trend-line/ RSI oversold zone. A break below that level, we'll consider a bearish signal, targeting the 1W MA200 (red trend-line). -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
ULong
by TradingShot
4
A traders’ week ahead playbook – rolling with a positive stance We roll into the new trading week with risk and sentiment on the front foot – a broadly weaker USD, a slight dip in US real rates and a 5% rise WoW in reserve liabilities (on the Fed’s balance sheet) all working concurrently as a tailwind. Certainly, the correlation with reserves seems key and where reserves go risky assets head in obedience – liquidity is always king. A lower VIX index into 22.8% and a pullback in S&P500 1-month put skew is indicative of funds reduction equity hedges, and we can see 20-day S&P500 realised vitality in decline, which suggests volatility targeting funds are increasing capital into the equity markets – it’s all flow that driving, and when we add in a solid Chinese credit data (August aggregate financing printed CNY2430b from CNY756b in July) and we see the AUD having a staggering move. Crypto too is having some fun, notably Bitcoin which eyes a test of $22k. We watch for how Asia takes the US lead and runs with it – futures markets indicate Asian equity markets will open c 1% higher, but will traders sustain the bid after the cash market unwinds or will they fade the strength? The early session could hold important intel on market psychology. As we note below there is a clear focus on US CPI – that is the marquee event risk this week, and while the momentum favours long equity, short USD for a tactical short-term trade, a hot CPI number will hurt. This is a dark sinister market and if you don’t have an open mind and are prepared to react to sentiment that can and will change on a dime, then you’ll feel it if using leverage – which is why we respect it, utilise in accordance to market volatility and accompany with correct position sizing, relative to the size of the account. Central bank speeches – the Fed are in a black period ahead of the 21 Sept FOMC meeting, where I am sure many in the market will welcome a lack of inputs from the various Fed members. The ECB will, however, be active, with 9 separate speeches that could impact EU assets – the market is already leaning towards another 75bp hike in October (currently there’s a 64% chance of a 75bp hike) - the increasing focus though is on clarity on ECB Quantitative Tightening (QT), a factor that may not come this week, but will almost certainly be the core focus in the 27 October ECB meeting. With that in mind, the EUR should become sensitive to Italian BTP - German bund yield spreads – currently at 232bp, if this spread pushes closer to 300bp (or 3%) then the EUR may attract sellers. Keep an eye on any further jawboning from the BoJ/MoF, who have done a good job of causing JPY shorts to part cover. I still don’t buy intervention at this stage and feel USDJPY needs to be closer to ¥147.00 to really be in play – we’d need a huge beat to US CPI for USDJPY to march towards that zone and we know any moves into ¥145 will get officials out on the wires, causing some anxiety from funds to hold JPY shorts. Rates Review – what’s priced into interest rate market and the step up (in basis points) to the following meeting On the data side – the key event risks: 13 Sept – UK jobs numbers (16:00 AEST) – the UK labour market is healthy at present, and we see no reason for that to change just yet – watch weekly earnings with expectations the 3m/YoY pace rises to 5.1% (from 4.7%) which supports the argument for higher inflationary forces. Unless we see a big miss/beat, the labour market data is unlikely to move the GBP too intently. 13 Sept – German ZEW Survey (19:0 AEST) – the market expects further deterioration in the ‘expectations’ survey (-60 from -55.3) and the ‘current situation’ survey (-52.1 vs -55.3) – which could have a modest impact on the EUR and GER40 but hard to see a huge vol move. 13 Sept – US CPI (22:30 AEST) – the marquee event that could rock all markets – the consensus expects a -0.1% MoM, which if true would be the first decline since May 2020 - this would lead the year-on-year CPI clip to fall to 8.0% (from 8.5%) – the economist’s range of estimates sits between 7.9% and 8.3%. Psychologically, a number below 8% could offer relief for risky assets, even if core inflation should increase though a touch to 6.1%. Watch shelter inflation closely for trends here. With 73bp of hikes priced for the 21 Sept FOMC meeting, the market is feeling confident that even an improved CPI print would not deter a 75bp hike – a view installed by Fed member James Bullard on Friday. Still, a headline CPI print below 8% and the USD should fall, and gold, crypto and NAS100 should rise strongly. A print above 8.4% would send risky assets lower. 14 Sept – UK CPI (16:00 aest) – the market is eyeing UK CPI to remain unchanged at 10.1%, with the range of estimates seen between 9.7% to 10.8% - the market is pricing 67bp of hikes at the 22 Sept BoE meeting (i.e 68% chance of a 75bp hike), so the inflation print could clearly affect that pricing. GBPUSD has rallied nicely off the March 2020 lows of 1.1412, but the upside should be capped into 1.1760 this week. GBPUSD 1-week implied vols closed at 12.27%, which offers a 167-pip move (higher or lower) on the week. GBPAUD shorts look a better play, especially if we get a weak US CPI, where a downside break of 1.6870 could start a bear trend. 15 Sept – Aussie jobs numbers (11:30 AEST) – the market is expecting 35k net jobs to be created in August (economists’ range is 110k to 10k jobs) – the U/R is expected to remain unchanged at 3.4%, but obviously that will be driven by the participation rate (consensus 66.5%) – The AUD obviously most sensitive here, where the risks are for a bigger negative reaction. With the labour market in good health, it's hard to see a number that price ‘expectations’ closer to 50bp for the 4 Oct RBA meeting. 16 Sept – China Industrial production (consensus at 3.8% vs 3.8% prior), retail sales (3.2% vs 2.7% in July) and fixed asset investment (5.5% vs 5.7% -all 12:00 AEST) – China's growth has been a clear issue, so these data points will be watched closely. Also, during the week (no set time) the PBoC may disclose changes to the MLF (Medium-Lending facility) – the consensus is the 1-year facility rate is unchanged at 2.75% - risky assets would welcome a cut here. 17 Sept – US Uni of Michigan survey and 1- & 5-10-year inflation expectations – the market expects a slight lift in consumer confidence, while 1-year inflation expectations are eyed to fall to 4.6% (from 4.8%), and longer-run inflation to remain at 2.9%. USD longs may cover hard if we saw a 5-10yr print below 2.7%, although their confidence will be shaped by the CPI print on Tuesday. Good luck to all,
PEPPERSTONE:US500Long
by Pepperstone
4
US30USD YM1! DOW 2022 SEP 12 Week US30USD YM1! DOW 2022 SEP 12 Week Last week's Scenario1 long on support of dotted trend line was good. Caution: long trap observed, do not chase long. Possible scenarios: 1) Long if 31450 / 31864-32029 is supported 2) Short on rejection of solid trend line / 32546 3) if triangle formation observed there may be short opportunity Price reaction levels Short on Test and Reject | Long on Test and Accept 32546 32029 31864 31450 30975 30406 Weekly: Low vol up bar close off high = minor weakness Daily: Low vol up bar close off high = weakness H4: Low vol narrow up bars + narrow close, followed by ave vol up bar + UT bar = weakness Remember to like and follow if you find this useful. Have a profitable week ahead.
CBOT_MINI:YM1!
by paradox677
Stocks Snap Losing StreakStocks snapped a losing streak yesterday as they gained strength off of Powells comments. The Fed is still expected to hike rates in September, with a 75 bps hike increasingly more likely. However, if and when inflation eases, we should see a more dovish stance. The S&P 500 broke through our target and upper bound at 4009, but is wavering in the vacuum zone between this level and 4068. If we reject current levels we could test the base of the 4000 handle or deeper into the 3900's. If we rally further, 4068 remains a target. www.cnbc.com
FX:SPX500Short
by quantguy
1
The Dow could appeal to bullish (or contrarian) swing traders Price action on the DJI (Dow Jones Industrial) and several other markets have flagged the potential for a contrarian setup (favourble for bulls). The Dow Jones has seen a relatively deep pullback against the rally from the June low, and there has been two false breaks of trend support over the past two sessions. Furthermore, a bullish engulfing candle formed yesterday which shows demand just above 3100. The stochastic oscillator is also oversold, although yet to general a traditional 'buy signal' by crossing bac above 30. But given we saw USD/CNH stall just below 7.000 and 145 reverse after tapping 145 suggests we may have reached an important inflection point in sentiment (at least over the near-term). If we want to think bigger and bolder, wave 2's tend to be the deepest - and bullish rallies generally begin during times of uncertainty. Against that backdrop the Dow Jones (and US indices in general) become contrarian candidates for bulls. Here's two ways to look at this, depending on anticipated hold time. 1 - For near-term longs: We'd like to see prices hold above yesterday's low and continue higher towards 3200 - 3250, before reassessing its upside potential. This approach requires a tighter stop and we're looking for a momentum / swing trade higher (sooner than later). 2 - For a 'longer-term' bullish setups: Perhaps the low is not yet but it is close. Instead, we see a volatile shakeout around current levels before a bullish move unfolds. In which case we'd want prices to remain above the 30,500 area (near a bullish engulfing candle from July) with a view for it to eventually break above the March high. This scenario allows for a wider stop and requires more patience. As we saw after the DAX reached out bearish target, prices have failed to reach new lows and have now turned higher. And if we consider how bad things are in Europe and the DAX is rising, perhaps we have reached that phase of the cycle where a countertrend move for global indices are the path of least resistance.
CITYINDEX:WALLSTREETCFDLong
by CityIndex
DOW JONES hit the Higher Lows line. 1D RSI oversold.The Dow Jones Index (DJI) is on its 7th straight day below the 1D MA50 (blue trend-line) having fallen almost -10% since its August 16 High caused by the strong rejection on the 1D MA300 (yellow trend-line). The price has hit today the Higher Lows trend-line that started on the June 17 Low and had one more contact on July 14. This is the only Support level that stands before a potential June 17 Low re-test, which is also where the 1W MA200 (red trend-line) is currently at, the index' natural long-term technical Support. As long as the Higher Lows hold, we can expect sideways trading within that trend-line and the 1D MA50. If the latter breaks, consider it a buy break-out signal targeting the 1D MA300 again or at least the 1D MA200 (orange trend-line) which was hit both on the June-Aug and Feb-March rallies. If the June Low and 1W MA200 break, then we can expect a new Lower Low around the -0.236 Fibonacci extension, as the May 20 Low did. On a short to medium-term perspective, this is a buy opportunity as the 1D RSI is touching the Oversold zone that has been holding since the 2020 COVID crash. As you see, every direct hit in the Zone has delivered a rebound of at least +8.00%. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
U
by TradingShot
2
Stocks Edge LowerStocks broke through relative lows at 3909 as anticipated. We gave up the 3900 handle entirely, and broke down into the 3800's, but found immediate support at 3887. We are testing 3909 from below at the time of this writing but the S&P 500 looks pretty weak. The Kovach OBV is on a steady downward decline, and we keep breaking levels from below. We should have strong support at 3848, a relative high/low from June. If we are able to pivot or we see a relief rally, then 3963 is a reasonable target.
FX:SPX500Short
by quantguy
Another Lackluster Week for Stocks?Stocks opened the APAC session weak (as expected). The markets appear to still be pricing in the recession and the results of the FOMC September 21. We aren't likely to get much of a break in stocks until after this rate hike, which some conjecture might be the last . The S&P 500 saw support from 3909, which was an auspicious level corresponding to a July low. The Kovach OBV, however, is still very bearish, suggesting that it will be an uphill battle for the stock market to claw back highs. If we get a relief rally, then we could test 4009. If we press lower, then 3848 is a reasonable target.
FX:SPX500Short
by quantguy
McDonald's MCD - I'm Lovin' Selling, and You Should be tooYou don't see just how highly priced McDonald's still is unless you look at it on the Monthly: I mean, this is the place that sells faux-food while CPI and PPI are through the roof, and it's still trading almost at its all time high. This is even more ridiculous than the positioning of Apple AAPL: Apple AAPL - Looks Fine on the Outside, but Tastes Weird And Tesla TSLA: Tesla TSLA - The Canary in the Coal Mine On top of that, this is one of the thirty companies that compose the Dow, which is the most bearish of all indexes, having already retested the pre-COVID highs, which SPX and Nasdaq have yet to do. The bottom line for everyone's least favourite, but most convenient, fast food dumpster fire is that the June --> August price action, was, like Apple, just a gap fill. And now, it's time to seek new lows. And those lows happen to be, conservatively, in the $245 range. This is a fat put if you buy puts, but a "my calls expired worthless so at least I can sob about my drawdown on Reddit" scenario for Robinhood's retail fodder. I can only encourage everyone who is still long on equities to get out this week. I truly believe that we are going to see a bounce that traps bears short but snares bulls long: SPX / ES - Bull Whips and Bear Saws With a looming VIX 72 (hasn't done much since COVID! It's two years! It's due! Be careful!) hanging overhead. VIX - 9x8 = 72 What lies ahead, after the trap has been executed, will come fast, and viciously, and it will seem as if the world is ending. If you buy when it's high because you are still thinking to yourself that this is the old paradigm, you're going to lose at least one finger, and probably three. This world is not one where you can use magic to regrow what's lost, you know? And so what I want to say is that you should protect what you have. If you can't get short, if you can't trade puts, then get cash heavy and reduce your risk. Ultimately, what's important in life is not money, which when you die you leave behind. It is maintaining your kindness. It is harbouring your virtue. This isn't moral dogma, unless you make it moral dogma. The path through the storm is to do better in your life. Been neglecting family? Fix it. Been a bad father? Fix it. Been a bad boss? Buy the secretary flowers and tell her that she's doing a great job. Make sure you mean it. You aren't such a bad guy. Make sure you mean it. Try your best. One day, in this lifetime, when the Chinese Communist Party falls, you'll instantly understand what I am referring to. Don't leave yourself with regrets on that day. That day is too late. You have to figure it out and do well before that day. It's just like poker, where you have to place your bets before the cards are face up. It doesn't count anymore after the cards are face up.
NYSE:MCD
by LordWrymouth
US30USD YM1! DOW 2022 SEP 05 Week US30USD YM1! DOW 2022 SEP 05 Week Last week's short on retracement/channel rejection was good. Temporary support at the moment at 31221. Possible scenarios: 1) Long at 31221 / dotted trend line support 2) Short on rejection of solid trend line / 32029 / 31221 / retracement on low volume Price reaction levels Short on Test and Reject | Long on Test and Accept 32546 32029 31221 30406 29639 Weekly: Higher vol than previous bar, narrower spread, close off low = demand coming in Daily: Ave vol down bar close off low = minor demand H4: Ultra high vol bar + up bar close of low = minior demand Remember to like and follow if you find this useful. Have a profitable week ahead.
CBOT_MINI:YM1!
by paradox677
2
SPX500 / ES1 - Saved by the BellIt is somewhat ironic that an eight minute Powell speech in front of a wood panel wall with a variety of vacuous, yet "hawkish," narratives is the catalyst for the market to begin to rightly seek new lows. Perhaps if they had hiked rates 200 bps we would have seen a 4,600 SPX print "because reasons." I've heard some say that the currency of central bankers is credibility, yet the Federal Reserve double talks, back tracks, and goes against its word all the time. They truly are market manipulators, and they truly lack credibility. Regardless, last week's SPX call was a sharp success, and price action shows that the bear market rally is likely finished. At least, if irrational mania is to continue, deeper lows ought to be sought first, and I believe we will see that imminently this week. This week is a tough forecast because Monday-Wednesday are August and Thursday and Friday are September, with the following Monday already being the week of September 5 to 9. BTC has lost the $20,000 marker and Ethereum has slipped under $1,500 already, and I believe we will see an even deeper dump on Sunday, which will cause their futures market to gap down, and it isn't going to fill. Since there is a correlation between the SPX and digital currencies, I believe that the indices will gap down as well, and SPX will seek lows under 4,000 and stocks will simply be a train wreck. We may quickly see a 30 VIX print, and many things will be startling. However, because Thursday and Friday are September's open, I really expect to see a healthy, albeit somewhat anemic bounce that will create a bull trap. If not, then the monthly candle will print something awkwardly like it is sitting at the moment, which doesn't make a lot of sense: What I ultimately want to say is that if you got stuck long at the top on equities, you should have a chance to mitigate your losses, but you should not expect that gap formed last week at ~4,227 to fill. Even less should you expect returns to highs. New highs are simply out of the question. You aren't likely to get out even if you got ahead of yourself. So cut your losses and mitigate your risk. If 4,227 was going to fill, they would have filled it during the Jackson Hole manipulation before the slaughter. Ultimately, we're still trading at a premium when measuring the overall run from June lows to August highs. The makers ought to have mercy on you by only driving to a discount for a day or two before monthly close. What comes in September, in my opinion, is the beginning of a descent below June lows. Fear will finally be employed. The Terminator algo will come with ferocity and break bull hearts, take out the pre-COVID high, and mark a significant change in market structure and sentiment. And then things will get interesting, because we have September futures expiry and September FOMC all within days of each other, and at the end of the month. Note that there is no FOMC in October, and note the U.S. midterm elections are also in October. You're going to hear the propaganda machine squawk a lot about recession this and fundamentals that as price crashes. You'll be encouraged to sell low, pay a lot of premium for puts, get short, and then, well... the market manipulators are the market manipulators, after all... This paradigm will not last forever. The world is in trouble, and the Chinese Communist Party will soon vanish overnight, with the world wondering how it could happen. The only hope for "stability" is mankind's return to tradition. What's important right now isn't making money, but it's how you position your heart and your mind amid the situations you find yourself in. Strengthen your soul's consciousness, strengthen your will, and stand fast to your kindness and rationality. That is the way to make it through. Trading brings out a lot of fear, and a lot of greed in a person. Work first on eliminating those attachments. When they're gone, you'll find yourself on level water and under the auspices of the Blue Dome of Heaven.
CME_MINI:ES1!
by LordWrymouth
1
DOW JONES on the 2008 crash fractal and how it avoids it. I've made many comparisons of Dow Jones' (DJI) 2022 Bearish Price Action with past Bear Cycles but being near closing its 3rd straight red 1W (weekly) candle since the August 15 rejection on the 1W MA50 (blue trend-line), it is time to update it. As you see, this is a comparison of Dow's 2021/2022 chart against 2007/2008. The dynamic factor is WTI Oil (black trend-line). As you see in July 2008 Oil peaked while the index had already started it's correction inside the new Bear Market. Dow's 1W MA50 rejection was followed by a sharp sell-off below the 1W MA200 (orange trend-line) where the 1W MA50 crossed below the 1W MA100 (green trend-line) to form a Bearish Cross. The time that the index reached the 1W MA200 from its Market Top was 37 weeks (259 days). At the moment the 2022 fractal looks to be following closely the 2008 sequence. If we exclude the fundamental extreme of the peak of the Ukraine - Russia war when Oil registered its peak (March 2022), its technical normalized top was in June 2022 right when Dow rebounded just before hitting the 1W MA200. See how even the 1W RSI sequences are identical so far. What this indicates is that Oil can continue dropping as the Fed attempts to lower an out of control inflation, but still stocks can fall along with it, just like it happened from mid 2008 to early 2009. As a result, the 1W MA50 rejection seems so far consistent with mid-phases of a Bear Cycle. Fundamentally, a big factor that is not consistent with the 2008 fractal is the strong labor market we're currently at, with the Unemployment Rate (teal trend-line) still on market lows as opposed to the 2008 fractal, which by the 1W MA50 rejection in May 2008, it was already rising aggressively. This means that technically, a weekly candle close above the 1W MA50 can be regarded as an invalidation of the Bear Cycle fractal. Also the 1W RSI printing Higher Highs can be taken as such. What do you think will happen next? Can Dow close above the 1W MA50 or August's rejection will hit the 1W MA200 as per the 2008 fractal? P.S. Because the chart has the added elements of WTI Oil and the Unemployment Rate plotted and pinned to scales B and Z, it is not constant and may appear distorted based on your screen's/ browser dimensions. The original looks like this below, so if yours doesn't, adjust the vertical/ horizontal axis in order to make it look like this and better understand what is illustrated: -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
TVC:DJI
by TradingShot
30