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Stocks Catching Support at LowsThe S&P has dipped again to make new relative lows at 3262. It has extended past our Elliott Wave at point C, which suggests that the corrective phase is not done yet. We are still in bull mode owing to the massive V-shaped recovery we did see after the Coronapocalypse. This burst of bear momentum has formed an ABC wave which may be part of the overall correction. If this is the case, we can expect another burst of momentum back to the 3300 handle. The Kovach OBV is pretty flat at this point so the ranging should continue. We are at the lower bound of the range at this point, another fact that may work to stocks favor.
FX:SPX500Long
by quantguy
Stocks are Ranging, What's Next?Stocks have been holding a very narrow range from 3310 to 3427 for several days. This suggests that the S&P is in a sideways corrective phase, and gearing up for a breakout either way. The Kovach OBV has been extremely flat throughout this period, which is yet another signal that momentum should come through soon. Stocks can only hold this narrow range for so long before a breakout. Watch the lower and upper bounds of the range, mentioned above for confirmation of the breakout. You should see clear momentum here, and big movement in the Kovach Momentum Indicators.
FX:SPX500Long
by quantguy
How to Trade Stocks Post FOMC?Stocks took a dive after the FOMC meeting. Apparently, they did not hear the magic words about stimulus that they were expecting. We are seeing good support around 3329. The S&P is bound to range at some point. This selloff was nowhere near the carnage we saw from massive corrections in recent history. It is still safe to say that stocks are likely to range between those levels we have identified for almost a month now: 3300 to 3427. Our traders made some great profit from shorting at 3427 yesterday. Levels trading seems like the best strategy for the S&P at this point. Watch the levels we have identified, like 3308, 3329, 3357 and 3375 in the near term
FX:SPX500
by quantguy
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What the FOMC Means For StocksStocks are drifting upward, but this is typical in the presence of a vacuum zone. It is rare to see any significant moves before an FOMC event unless something got leaked. The rates and forward guidance should be priced in already. As we discussed before the S&P is likely to remain bound by 3427, at least before the event. The Kovach OBV is trekking up but at a lackluster pace. Watch for resistance at 3427, and a potential retracement into the event. The Fed is highly likely to come across as dovish, so it is difficult to find any reason to short of stocks, just wait to verify that their statements are aligned with expectations, before pulling the trigger.
FX:SPX500Long
by quantguy
What's in Store for the US Dollar?The US dollar has receded again, and we warned you about the issues it may have at highs. We explicitly called your attention to the fact that breaking the upper 93 handle would confirm bullishness and it does not appear that the dollar is ready for this yet. That being said, 92.72 will provide support, which we are nearing at this point. Watch this level because if there is more bear momentum, we have several vacuum zones below and the DXY could easily retrace to lows again. Wait for the Fed event tomorrow to confirm anything definitive.
TVC:DXY
by quantguy
Will Oil Breakout?After plummeting about $7, oil is maintaining the range along with other assets as it finds footing in this new territory. We have very good alignment between our Fibonacci levels and other technical levels. We can therefore be confident in the areas of strong support and resistance. Currently, oil is stuck between $36.18, the lower anchor of the Fibonacci levels, and $37.92, the .236 Fibonacci level. We have two technical levels in between. Currently, oil is sitting at one of these, $37.24. The Kovach OBV has completely flatlined, suggesting that the bleeding is over for now. If you anticipate a breakout, watch for buying volume at the upper bound of the range above.
NYMEX:CL1!
by quantguy
Are the Dollar Bulls Back?The US dollar has retraced slightly since its breakout over the past few trading days. It has made a run for the upper 93 handle, but still can't quite seem to break 93.83, the level we are eyeing to break this range held for weeks. In fact, it has seemed to reject these levels, and retraced back to the low 93 handle, where it is currently finding support. This is a significant level. If it breaks, we can anticipate more retracement, perhaps even to the lows established earlier this month. If it catches steam, as we anticipate, it could make a run for 93.83 again.
TVC:DXYLong
by quantguy
Elliott Wave Breakout in Stocks?Stocks look like they have caught support after the huge sell off afflicting tech stocks in particular. Regardless of what this may look like in the near term, if you zoom out to view the S&P on a grander scale, back to June, you will see that this is but a healthy corrective wave in a 5-3 Elliott Wave beginning June 10 or so. We should expect stocks to bounce back really soon. There are multiple levels of support below, and a vacuum zone down to the psychologically and technically significant 3200 level if we are wrong. Be careful, because we could see another small selloff or volatility before another rally. It is doubtful stocks will break 3293, where they found support earlier. The Kovach OBV is picking up which means we could see some momentum today
FX:SPX500Long
by quantguy
Double Bottom in Stocks?Stocks have gotten battered recently, smashed over 200 points from all time highs. It is difficult to say if they have bottomed out, but it looks like we will see another wave of selling towards the open. The level 3375 seems like it will provide good support. It seems like this would be a good point to try to enter a long trade. It would also constitute a double bottom which would be very bullish for stocks. If we are wrong, there is a vacuum zone below so keep a narrow stop. If it crosses the vacuum zone, we have another level at 3329. The Kovach OBV is trending up slightly so perhaps a buyback is near.
FX:SPX500Long
by quantguy
Inverse Head and Shoulders in OilOil is forming an inverse head and shoulders, after a huge selloff which finally broke the range it had been establishing over the past week. That range was unusually low for oil and we anticipated a breakout at some point regardless. In a previous briefing we alerted you as to the psychologically significant $40 level. The head of this this inverse H&S came very close to this level before retracing to form the rest of the pattern. There is a vacuum zone above back to the lower bound of the previous range at $42.48. The Kovach OBV is still bearish but it appears to be picking up. The Kovach Chande is quite bullish, which means a breakout could be near. Watch lower levels for exit if we are wrong.
NYMEX:CL1!Long
by quantguy
Stonks Only Go UpStonks only go up. The S&P has yet again made new highs, despite very real risk factors geopolitically, socially, and economically, not to mention an election coming up. The move in the S&P was very strong, and it has already hit the Fibonacci extension from the levels anchored on the previous relative high and low. It is difficult, but important, to avoid FOMO here, since a correction will be swift and has a vacuum zone below to cross. Right now, after such a move, the S&P is at least likely to range if not correct to lower levels.
FX:SPX500Long
by quantguy
How to Trade the US Dollar SelloffThe US dollar just can't seem to get a break. It has been persistently sold off, and appeared to gain some steam last weak as it ranged about 92.25 to 93.44. But this was merely a pause to the overall trend, and relentless selling began again yesterday. It solidly broke 92.25, and careened to the next level of support, which we clearly outlined in the ghostsquawk-vip channel yesterday. This level is 91.82, and is extremely significant because it marks the first time the dollar has entered the 91 handle in over a year. It us currently holding on for dear life at this level, and it does not look like it will hold. For the next level of technical support we seem to find agreement between the next technical level at 90.96 and an inverse Fibonacci extension at 91.08. Either way, there is a huge vacuum zone below if current levels do not hold.
TVC:DXYShort
by quantguy
Top Trading Strategy for StocksStocks ain't got time for coronavirus, trade tensions with China, or riots and civil unrest in the United States. The S&P has broken out from an inverse head and shoulders pattern and solidly established new monthly highs. This is most likely the beginning of a new Elliott Wave impulse. Both Kovach momentum indicators are very bullish at this point, so wait for a squeeze before open. This risk on sentiment seems to be off earnings and upgrade ratings. Oil traders seem exuberant over an OPEC+ output cut extension which won't hurt either.
FX:SPX500Long
by quantguy