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Market Report – 11.21.2011

November 21, 2011 By 2 Comments

As you may have noticed we have changed the format of our website to better accommodate our new features such as membership content and newsletters.  If your interested in the membership content please email me at marketoverflow@gmail.com.  Our membership content may go live as early as this evening, but more updates will be coming about that.  However, we will still post free content until the membership is completely live.  Once the membership content is live, we will only offer a limited amount of content for free.  We hope that you have enjoyed the analysis we have provided for the last 4 months, and have profited from it greatly.  Our fund continues to perform very well, as we  have taken trades that we have forecasted for that last several months.

Regarding the markets, I have had several emails asking about the price action unfolding since the Sunday session open.  The “risk off” sentiment should continue to increase in momentum as we have been forecasting for weeks.  The USD has strengthened and equities have weakened, which is what we suggested would happen for weeks now.  Our bias has not changed.

Now looking at the ES, the equity futures have moved sharply to the downside as expected indicating that the SPX will open sharply lower.  Support may come in at 1186 and 1178 for a minor retracement before the downside continues to about the 1144 area which is our initial target.

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ES 4Hour Candle chart



Crude Oil has broken through our trend line support which we have been suggesting would be a trigger for “risk off” price action.  This breach will likely accelerate to the downside and cause the USD Index to strengthen further and the SPX to weaken further.  Longer term, crude oil is headed much lower.

CL Daily Candle chart


The USD Index continues to push higher.  We are looking towards the 80.63 level as our initial target.

DX 4Hour Candle chart

 

The EURUSD should break down much more in the days ahead.  Our initial target is 1.3021, which should be reached soon.

EURUSD 4Hour Candle chart

 

The AUDUSD continues its bearish price action as well.  Support will be difficult to come by in the days ahead.

AUDUSD 4Hour Candle chart

 

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – Evening Post – 11.17.2011

November 17, 2011 By Leave a Comment

I apologize for the late update everyone, but have been focused on finishing up the website changes and will soon be ready for the subscription membership functionality.  Many of you have been asking about more details, and that will come this weekend that.

Our bearish break lower occured as expected.  I hope many of you were able to catch a piece of that.  We are expecting a possible pullback towards the triangle formation before resuming the move downwards.  There is plenty of wood to chop at levels just below current levels.  

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SPX 4Hour Candle chart


We have been waiting for this trend to eventually break for crude oil.  It appears that we may have a wave (b) top.  

CL Daily Candle chart


Our expectation for Gold has been for a corrective move higher, and we may have put in a wave b.

GC Daily Candle chart

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – 11.15.2011

November 15, 2011 By Leave a Comment

UPDATE

As of 11.15.2011 – 10:30am cst

Volatile markets in the morning trading session.  Crude oil seems to be holding up pretty well and the sell off in equities continues to be weak.  At this point I’m expecting the 1240 or the 1234 levels to hold price action from making a sustained move lower on the SPX.  So at this point our alternate, shorter term, bullish risk counts are favored.  We will provide updates as price action develops further.  A wait and see approach still seems prudent at this point.

Today seems like another wait and see day.  There will be plenty of moves to take advantage of in the days ahead, but it is important to trade lite or simply wait for confirmation before entering trades.  We will be keeping a close eye on the SPX today based upon the two counts we presented last night.  We are waiting for one of them to be confirmed.

Crude oil continues to flirt with trend line support.  We will be watching this closely today.  A sustained break below the 97.50 level today, and we may be seeing the beginning of a larger “risk off” move unfold in the markets.

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CL Daily Candle chart


Here is an update of our primary USD index count, which expects immediate upside price action in the days ahead.  The over night session gave us more upside price action, but it must continue above the minor wave 1 high in the near term for confirmation.  A point of concern is conditions are nearing overbought territory for a wave 3.

DX 4Hour Candle chart



An updated look at our alternate USD Index count can still allow for the correction to continue lower in the short term before the bullish trend resumes.  Longer term our bias remain bullish.

DX 4Hour Candle chart

The EURUSD seems to continue to push lower below our two resistance levels.  A move below minor wave 1 lows will increase our conviction of this wave count.  Caution though as we near oversold levels.

EURUSD 4Hour Candle chart

The AUDUSD count sees a 1-2, 1-2 development and has continued to push lower.

AUDUSD 4Hour Candle chart

A closer look at the AUDUSD chart sees two critical levels to break through the keep the downside movement going.  Those levels are 1.0107 and 1.0051.

AUDUSD 4Hour Candle chart

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – Evening Post – 11.14.2011

November 14, 2011 By Leave a Comment

We have two wave counts for both the SPX and DX that are very important for price action in the days ahead.  Both are bearish equities and bullish on the USD for the longer term.  The shorter term is in question for both.

Crude oil remained above our trend line, which means that wave (b) might not have completed yet.  We need confirmation of a sustained break below the trend line for a larger bearish move to be underway.

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CL Daily Candle chart


Our primary USD index count expects immediate upside price action in the days ahead.

DX 4Hour Candle chart



The alternate USD Index count allows for the correction to continue lower in the short term before the bullish trend resumes.  Longer term our bias remain bullish.

DX 4Hour Candle chart

The primary SPX count expects price action to continue to drop in the short term and should increase in momentum.

SPX Daily Candle chart

The alternate SPX count allows for more upside price action in the days ahead to above the 1300 level.  Longer term our bias remains bearish.

SPX Daily Candle chart

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – 11.14.2011

November 14, 2011 By Leave a Comment

This week should prove to be an interesting week that could set the stage for the remainder of the year.  An important chart that we have been watching for the last couple weeks is CL.  We have been looking for indications of a potential top for crude oil, which would make 5 waves completed and a possible end to major wave (b).  A sustained break below the 97.00-97.50 trend line would prove to be bearish in the short term at minimum, and very likely the longer term.  The reason we are particularly interested in this chart is that crude oil typically acts as a leading indicator for equities.  A move lower in crude oil would be very bearish for equities in the longer term.

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CL Daily Candle chart


The USD index is still holding up in terms of our primary count, which would imply much more strength ahead in the short term.

DX 4Hour Candle chart



We posted last night a EURUSD chart and pointed out the trend line resistance that price action hit during the Sunday session open.  Since then price action has moved much lower and in impulsive fashion.  Our primary count has held up and our confidence will increase if we see more momentum to the downside.  Some critical levels are the 1.3654 and 1.3565, which should act as potential support.

EURUSD 4Hour Candle chart

The EURUSD fib support levles are below and are important to keep an eye on.  A break below the 1.3483 level would prove to be very bearish for the longer term.

EURUSD Hourly Candle chart

The USDCAD seems to be stuck, but our primary count remains valid still.  A larger move up in the short term will increase the likelihood of this count.

USDCAD Daily Candle chart

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – 11.11.2011

November 11, 2011 By Leave a Comment

Should be a slow day for the makets with the holiday today, so we aren’t epecting too much.  There have been several emails asking for some shorter time frame charts on the currencies.  We have provided those below. As we look across the charts, the common theme seems to be a triangle correction that should continue today.

We have revised our Crude Oil wave count and see critical resistance ahead at 99.37.  Once the trend line is broken on a move lower, price action should begin to move swiftly to the downside and help jump start a larger “risk off” theme.

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CL Daily Candle chart


Looking a bit lower for the USD Index before it continues higher in the trend.

DX Hourly Candle chart



The EURUSD is likely to continue its correction higher before it resumes its downward trend.

EURUSD Hourly Candle chart

The AUDUSD is looking to squeeze out more short positions before it makes its journey lower.  Next week should be interesting.

AUDUSD Hourly Candle chart

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – Evening Post – 11.9.2011

November 9, 2011 By Leave a Comment

Big down day for equities.  It seems that it wave (ii) may be complete and wave (iii) could be underway.  If so, we should expect to see the SPX to continue to sell off with more momentum.  It seems likely that we are in a wave 3 acceleration lower given that the USD is pushing higher and bonds yields are dropping.

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SPX Daily Candle chart


Crude Oil may be putting in a longer term top and setting the stage for much lower prices in the weeks ahead.  

CL Daily Candle chart


Gold seems to be backing off of 1775 fib resistance which could be a wave b top.  The correction is likely to continue lower.

GC Weekly Candle chart

The USD Index broke out of our channel and may be off to the races higher towards our target of 81.41, which may only take a couple weeks.

DX 4Hour Candle chart

If we see equities continue to sell off tomorrow, which would further confirm a wave 3, then we may see the USD go vertical towards the 80.08 level.  This seems crazy, but it is within the realm of possibility given the circumstances.

DX 30min Candle chart

The AUDUSD has confirmed a move lower for wave 3 with much lower levels ahead.

AUDUSD 4Hour Candle chart

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – 11.4.2011

November 4, 2011 By Leave a Comment

We are not expecting too much today in terms of moves, possibly more “risk on” only because a reversal move doesn’t seem likely on a Friday.  If the jobs report is unexpectedly bad, then that could be a catylist, but if it is mild to positive then we may see the SPX get overextended to the upside.  Make no mistake, our bias is still bearish and waiting for the first confirmation of the “risk off” reversal.  These opportunities allow us to better position ourselves for the next big move.  Patience is required. 

Here is a look at Crude Oil, which is facing resistance and the 50% fib level, but a break higher sees the 61.8% fib level at the 99.65 level, which is an attractive level.

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CL Daily Candle chart


A closer look at Crude Oil shows that we still need a push higher to complete five waves according to this wave count.  This makes a case for a bit more “risk on” in the short term.

Hourly 4Hour Candle chart


The EURUSD appears that it wants to make a push higher to the 50% fib retracement level before it potentially reverses.

EURUSD 4Hour Candle chart

The USDCAD seems to want to push higher with USD strength before the other USD currency pairs.  This is usually typical for the USDCAD as a leading indicator.  

USDCAD Daily Candle chart

Comments are welcome on our analysis as we encourage an open dialogue.  We would be more than happy to answer any questions that you might have.

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Market Report – 10.26.2011

October 26, 2011 By Leave a Comment

In the Market Report – Evening Post, we update our SPX, EURUSD, and DX wave counts, which all point to further “risk on” for the near term.  You can view that analysis here.

A quick look at the ES shows a possible completed wave 2 correction.  If not, we may see price action drop a bit further, but should stay above 1200 at a minimum.  We expect price action to push higher in the short term.  Our bias is bullish.

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ES Hourly Candle chart


The USD Index may have a bit more upside to complete the temperary correction higher for a minor wave b, but we expect the downside to continue.  Our updated target is the 74.84 level with the 74.04 level in extention lower.  Our bias is bearish for the short term.

DX 4Hour Candle chart


We have been tracking this Gold wave count for several weeks now, and expect price action to continue to push higher over the next couple weeks.  It is likely that this move higher is only going to complete wave b with more downside in the weeks ahead.  Our bias is bullish for the short term.

GC Daily Candle chart

A look at Crude Oil is interesting as we have updated our wave count.  It seems that we only have a three wave move lower to complete wave (a).  We are likely going to see price action push higher in the days and weeks ahead, which is likely to keep the “risk on” trade going.  If price action moves above the 95.28 level, then we will likely see the 100.62 level next.

CL Daily Candle chart

Please feel free to comment on our analysis as we welcome feedback.  We would be more than happy to answer any questions that you might have.

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Market Report – Evening Post – 10.20.11

October 20, 2011 By Leave a Comment

Well price action continues to hint that the “risk on” trade wants to push higher in the days and weeks ahead.  The range-bound movement in the markets for the last several days is likely exhausting bull and bears, preparing trading conditions for a breakout.  It seems that the market is heavily short risk, therefore, when any bullish opportunity arises there seems to be a short squeeze higher.  Until the market shifts its sentiment to more of a bullish stance, the path of least resistance seems higher for equities and commodities, and lower for the USD.  In short the market is overly bearish.  This perspective does not change our bullish bias for the USD and bearish bias for equities in the months ahead.  In fact, these conditions offer a great trading opportunity.  Below are the alternate wave counts that I mentioned yesterday, which have become our favored wave counts.  We will only post the DX and CL tonight because we believe that these two charts are the most important in terms of hinting where the markets are headed next.  We will present our new wave counts for our other currency pairs, commodities, and indexes that we analyze.

The USD index has a wave (i) completed, and is now working on wave (ii) to the downside.  It appears that wave a and wave b are likely finished with wave c currently unfolding.  The wave is likely to move lower in a complex fashion.

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USDX 4Hour Candle chart


Crude oil is likely going to thrust higher in the days ahead to break out above the trend line resistance.  Our wave count sees a completed 5 wave sequence lower with a wave a move higher and a wave b correction lower.  Wave c is likely to correct to 91.09 at minimum in the days and weeks ahead.  Our bias remains bearish for the longer term and months ahead. 

CL Daily Candle chart


Please feel free to comment on our analysis as we welcome feedback.  We would be more than happy to answer any questions that you might have.

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