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SPX Double Top at 61.8% Fibonacci LevelThe S&P 500(SPX) closed today at $2,820 for a -$50.12(-1.75%) loss. Price is coming off of a second test and rejection from the 61.8% Fibonacci retracement level which has created a potential double top pattern at that critical Fib level. Price managed to hold above the 50% Fibonacci level on today’s selloff which is the midpoint of the total Fibonacci range from the February high to the selloff low made in March. In general, price trending above the 50% Fib level is considered bullish, while trending below the 50% is considered bearish. In order to be considered in a healthy uptrend price would need to be trading above the 61.8% Fib level. The level to watch going into the end of the week is the 50% Fib and whether or not price can hold above it. Today’s price candle closed gray which indicates a loss of upward price momentum with my candle color algorithm. We still have a broken rising wedge pattern in the chart as well and a lower price target that price could still potentially reach. For a breakdown of how this target was calculated refer to this post here: The Relative Strength Index(RSI) shows the green RSI line crossing below the purple signal line which indicates a loss of upward momentum in the short-term. The green RSI line is also close to crossing below the 50 level which is the midpoint of the total RSI range. In general, an RSI reading above the 50 level indicates overall bullish momentum behind price while a reading below 50 indicates overall bearish momentum behind price. The Price Percent Oscillator(PPO) shows the green PPO line crossing below the purple signal line which indicates a loss in upward momentum in the short-term. Both lines remain above the 0 level though which indicates that price still has bullish momentum in the intermediate-term. A PPO reading above 0 indicates intermediate-term bullish momentum while a reading below 0 indicates intermediate-term bearish momentum. The Average Directional Movement Indicator(ADX) show the purple directional line crossing above the green directional line which indicates a bearish trend, or direction, in price is forming. The histogram in the background represents trend/direction strength and for now remains weak. For the dominant trend to have strength the histogram bars need to be rising, and since we have the purple line above the green line indicating a bearish trend, and a low histogram reading, the current shift to a bearish trend is weak for now. Volume spiked to a 9-day high on today’s selloff which indicates more traders entered the market to sell today than seen on any single day over the past 9. Going forward we need to pay attention to volume on potential any selloff continuation as rising volume during a decline would be a bearish indication. Overall price remains neutral here, but is forming a bearish bias with the double top at the 61.8% Fib level and lower indicators that are hinting at short-term bearish trend/momentum forming. The short-term support level that needs to hold is the 50% Fib retracement level which is right near where the stop-loss level is for long trades. Should price move below the stop-loss level the shift from a bullish trend to bearish trend will increase thus putting the lower target near $2,423 in play going forward. Today’s decline seemed to be influenced by a statement from Federal Reserve Chairman in regard to the Fed not looking at taking the Federal Funding Rate into negative territory, which many traders are expecting as a possibility going forward this year. Chairman Jerome Powell also expressed concerns about the economic recovery and basically said that we are not out of the woods yet and that more headwinds lay ahead for markets: There were also a few bearish articles released today from some of the titan traders on Wall Street, such as Stanley Druckenmiller and David Tepper, who stated that markets remain overvalued and look similar to the dot-com bust.
SP:SPX
by PrepForProfit
Bitcoin Halving 61.8% Fibonacci RejectionBitcoin(BTCUSD) has moved back below the 50% Fibonacci retracement level after hitting 61.8% Fibonacci resistance near $10,000 this past Thursday into Friday as traders pushed price higher ahead of the halving event which took place today. The rally on Friday was also fueled by legendary trader Paul Tudor Jones announcing that he has entered the cryptosphere as an inflation hedge. The push up to the 61.8% Fib level was strong enough to create yellow price candles which indicate bullish momentum volatility according to my price candle algorithm. During periods of bullish volatility it is risky to short or exit trades as price is most likely to head higher, but once the bullish momentum volatility goes away the move that follows is important to watch. As a rule, if price remains above the first yellow candle then the trend and momentum bias is still to the upside. If price falls below the first yellow candle it shifts the bias to bearish. For now price remains above the first yellow candle seen leading up to the rally into 61.8% Fib resistance which indicates that there is still a bullish bias, or a positive trend behind price. Today’s price candle is indicating trader indecision as the candle color has shifted to gray which indicates no momentum. Today’s candle is also a doji candle which is a price candle with a small body and upper/lower wicks of relatively the same length. This shows that traders attempted to push price higher and lower but were able to maintain the upper and lower price levels and ultimately are going to close today’s price near where it opened. Neither bulls nor bears were able to direct price with conviction in either direction. The Relative Strength Index(RSI) show the green RSI line retreating from highs near the 80 level which indicates a loss in upward momentum. The green RSI line has also crossed below the purple signal line which is a bearish cross and indicates further weakening in short-term upward momentum. The rate of decline in the green RSI line as decreased just above the 50 level which is the midpoint of the total RSI range. The green RSI line trending above the 50 level generally indicates overall bullish momentum while an RSI reading below 50 would indicates overall bearish momentum. Going forward the RSI line needs to hold above the 50 level in order to maintain bullish momentum bias. The Price Percent Oscillator(PPO) show the green PPO line crossing below the purple signal line which is is a bearish cross and indicates a loss of upward momentum in the short-term. Both lines remain above the 0 level for now though which indicates that the overall momentum is still positive. A PPO reading above 0 indicates overall bullish momentum while a PPO reading below 0 indicates bearish momentum. The Average Directional Momentum Index(ADX) shows the green directional line declining and close to crossing below the purple directional line. When the green line is above the purple line it indicates a bullish trend direction in price, when the green line is below the purple line it indicates a bearish trend direction in price. The histogram in the background is declining which indicates that direction strength is weakening, and since the green line is above the purple line at the momentum the declining histogram indicates a weakening bull trend in price. Volume has been on a slight increase during the run up in price, but overall is still relatively low compared to volume seen during previous advances and declines in price. Overall, the current view on Bitcoin here is neutral based on the rejection off of the 61.8% Fibonacci level, the cross back below the 50% Fib level as well as the return to a gray price candle. The momentum and trend indicators are pointing to a period of consolidation or pullback as they are showing a loss in upward trend and momentum. For now the main level to watch is the red line stop-loss level near $7,300 which is just below the 38.2% Fib level. This stop-loss level is placed just under the first yellow candle which is when bullish momentum volatility began leading into the halving event and is the level that price needs to remain above for price to be considered in an uptrend. Falling below the 38.2% Fib level would also put price back into the purple shaded area which is a bearish area of the total Fib range. In general, you want to see price trending in the green shaded area above the 61.8% Fib level as a sign of a strong uptrend. The move now is to wait for a move above the 61.8% to go bullish, while a move below the 38.2% would be bearish.
COINBASE:BTCUSD
by PrepForProfit
SPX Weekly $2,950 Resistance TestThe weekly SP500 chart shows price testing, and closing at, $2,950 which has been a major support and resistance level going back to September 2018. Price briefly held above this level for two weeks at the beginning of the coronavirus selloff, but ultimately failed to hold and fell down to the $2,200 level before the relief rally that we’ve seen over the past 7 weeks which has taken us back to this critical level. This will be the main level to watch this upcoming trading week and will likely be the deciding factor as to whether price moves higher, or is once again rejected and puts a re-test of the March lows back in play. Unlike the green candles seen on the daily chart which indicate a bullish trend, the weekly chart failed to show bullish momentum and instead shows gray candles which indicate no momentum behind price which could indicate that a rejection at the $2,950 is more probable than a push above this resistance level. The Relative Strength Index(RSI) shows the green RSI line hesitating just below the 50 level which is the midpoint of the total RSI range. An RSI reading below 50 indicates bearish short-term momentum while a reading above 50 indicates bullish short-term momentum. The green RSI line is still below its purple signal line which is another bearish momentum indicator. The Price Percent Oscillator(PPO) shows both the green PPO line and purple signal line both below the 0 level which indicates bearish momentum. However, the green line is rising and on a path to cross above the purple signal line which would be a bullish momentum cross. If that cross occurs, we would want to see both the green PPO line and purple signal line move back above the 0 level. A PPO reading above 0 indicates bullish momentum while a reading below 0 indicates bearish momentum. The Average Directional Movement Index(ADX) shows the purple directional line above the green directional line which indicates that price remains in a negative direction bias. This histogram behind the directional lines is above the 25 level which indicates a strong trend, but is beginning to tick down which means that the negative trend in price is losing strength. Going forward, we would want to see the green line cross above the purple line as a sign of a bullish price trend, and for the histogram in the background to rise indicating a strong bull trend. Volume remains bearish with a series of purple bars which indicates that price volume is in a bear trend. Bright purple indicates that price is lower than 10 days prior and volume is higher. Dark purple indicates that price is lower than 10 days prior but volume is lower. Bright green indicates that both price and volume are higher than 10 days prior, while dark green indicates that price is higher than 10 days prior, but volume is lower than 10 days prior. Going forward we would want to see the volume bars turn shades of green in order to reflect a bullish trend in price and volume.
SP:SPX
by PrepForProfit
SPX 61.8% Fib Test & Rising WedgeThe S&P 500(SPX) closed Friday at $2929.81 for a +$48.61(+1.69%) gain. Price closed right at the 61.8% Fibonacci retracement level which is where price peaked on April 29th(red arrow) before seeing a slight pullback to the 50% Fibonacci level. The 50% Fibonacci level is the midpoint of the total Fib range from the all-time high of $3,393.52 made in February to the coronavirus selloff low of $2,191.86 made in March. Price trending above the 50% Fib level indicates a bullish trend in price while trending below the 50% level indicates a bearish trend in price. A strong bull trend would require price to be trending above the 61.8% level while a strong bear trend would need price to be below the 38.2% level. Price has already been rejected from the 61.8% level once on this relief rally so testing this level again will be significant going in to next week. A move above the 61.8% level would be considered bullish, while a second rejection would be considered bearish and likely lead to price falling back down to test the 50% level again. Price has created a rising wedge pattern which is a bearish type of price pattern. Rising wedges are a price pattern that have a wide base(A-B) and as price moves higher the distance between the highs and lows decreases creating a more narrow range. Once price reaches the apex of the wedge and falls below the lower support line of the wedge a measured move can be calculated in order to determine a potential lower level that price can be expected to reach. The measured move is calculated by taking the distance between the high and low of the base(points A and B) and subtracting that difference from the opening price of the first candle to open below the lower line of the wedge(C). Candle A had a low of $2,191.86 and Candle B had a high of $2,637.01 for a difference of $445.15. (A $2,191.86 – B $2,637.01 = $445.15) This value is then subtracted from the opening price of candle C which is $2,869.09 and gives us a lower price target of $2,423.94. ($2,869.09 - $445.15 = $2,423.94) While a lower target can be calculated, it doesn’t indicate that price will definitively reach the target as rising wedge patterns only have a 60% probability of success, but it remains a pattern to keep an eye on regardless. The Relative Strength Index(RSI) shows the green RSI line trending above the 50 level which indicates a bullish short-term momentum bias behind price. An RSI reading above 50 is considered bullish while an RSI reading below 50 is considered bearish, with the 50 level being the midpoint of the total RSI range(0-100). The purple RSI signal line is rising which indicates bullish momentum in the intermediate-term and is now crossing above the 50 level as well. The Price Percent Oscillator(PPO) shows the green PPO line and purple signal line both trending above the 0 level which indicate bullish momentum behind price. A PPO reading above 0 indicates bullish price momentum while a reading below 0 indicates bearish momentum. The green line trending above the purple line indicates a bullish momentum trend which is what we are seeing now, but both lines have leveled off indicating a loss of upward momentum in the short-term. In general during an uptrend in price, you want to see the green line trending above the purple line, and for both lines to be rising above the 0 level. The Average Directional Movement Indicator(ADX) shows the green directional line above the purple directional line which indicates a positive trend behind price. The histogram behind the directional lines has been on a steady decline ever since the green line crossed above the purple line which indicates weak, or declining, trend strength. In general during an uptrend in price, you want to see the green line rising above a declining purple line, with a rising histogram in the background which would indicate strength in the uptrend. Volume during and after the selloff has been higher than that seen during the move to the all-time high made in February, but volume has been declining ever since the selloff low as price has moved higher. Declining volume as price moves higher is bearish and indicates that less traders are willing to buy which is needed in order to sustain the move higher in price. Overall, the move higher in the S&P500 has been in contradiction to the underlying fundamentals in the economy which are overwhelmingly bearish with a record 33 million people having filed for unemployment benefits over the past 7 weeks and global trade essentially coming to a halt. 30% of companies in the S&P500 index have given up on providing forward guidance as the virus has led to a collapse in revenue and earnings as they were forced to shut down operations. Many companies have also suspended share buybacks and dividend payments which was a driving force in share prices over the past 10 years on the march to new all-time highs including the peak seen in February. Traders and investors appear to be betting on the Federal Reserve backstopping markets via unlimited money printing which for now is succeeding in propping up stock prices. We’ll need to see how consumers react to the re-opening of the economy and whether or not they will be as strong as they were leading up to the pandemic as consumerism makes up 70% of GDP. With 33 million people out of work the obvious trend would be a decline in spending, but the obvious hasn’t been too relevant with central bank intervention in markets as true price discovery has been destroyed. Going forward, if price were to make a new high above the 61.8% Fibonacci level and take out the high made on April 29th(red arrow) it would negate the current rising wedge pattern and likely lead to a continuation in price to the upside. It would also lead to a redrawing of the lower wedge line to just below candle C and the 50% Fibonacci level where the last low was made prior to the potential move higher, and then we would watch for a possible rejection at the upper wedge line again. Should price reject at the 61.8% Fib level again and move below the 50% Fib level it would put the lower target of $2,423.94 in play which is roughly -17% lower than where price closed on Friday. Current view on the SP500 is neutral. A push above the 61.8% Fib level would be bullish, while a cross below the 50% Fib level would be bearish.
SP:SPX
by PrepForProfit
Silver Trendline TestSilver(Sl1!) closed at $15.59 from an opening price of $14.92 for a gain of $0.67(+4.49%) today. Price also closed just above the orange downtrend resistance line which is bullish seeing as how this line has been acting as resistance since early April. Going forward, we need to see price hold above the orange resistance line and make an eventual push above the horizontal red line at $16.30 which is a strong price level stretching back to July 2019 where price peaked and then eventually rose above, and then found support at again in late 2019. This level briefly acted as support in February 2020, but then failed in March with a rejection at that level coming in again in April. A move above $16.30 would be significant and likely mark the beginning of a new push back up toward $19. The stop-loss level for long trades rests at $14.50 which is near the low made in mid-April, as long as price remains above that level the short-term trend will remain bullish. The Relative Strength Index(RSI) show the green RSI line rising up off of the 50 level which is the midpoint of the total RSI range. An RSI reading above 50 indicates bullish price momentum while a reading below 50 indicates bearish price momentum. The purple RSI signal line is also rising, but remains below the 50 level with a cross above looking to come soon. The signal line indicates intermediate-term momentum so that line rising above the 50 level would be another bullish indication that price is gaining upward momentum. The Price Percent Oscillator(PPO) show the green PPO line and purple signal line overlapping at the 0 level. In general, you want to see the green line rising above the purple line and for both lines to be trending up and above the 0 level. Both lines trending up above the 0 level indicates bullish price momentum. The Average Directional Movement Index(ADX) show the green direction line trending above the purple direction line which indicates a positive trend in price. The histogram behind the ADX lines is trending flat which indicates no strength in the trend yet. In general during an uptrend, you want to see the green line rising above the purple line and for the histogram bars to be rising as a sign that the trend is increasing in strength. Volume is relatively low, but beginning to show a slight uptick. Should price continue higher we would want to see volume rise in order to sustain the movement in price to the upside. Overall, silver is looking good here today with the strong move in gold. The gold-to-silver ratio remains near all-time highs at 112:1, meaning it takes 112 ounces of silver to equal ounce of gold in price. Historically, a ratio of 80:1 is considered high and a good time to enter silver trades. The historical average over the past 5,000 years is a ratio of 15:1, so we’re either looking at gold price being extremely overvalued, or silver being extremely undervalued. It’s my opinion that both are still very undervalued with silver being the more extreme of the two. As gold continues to gain in price I expect silver begin to close that ratio and outperform gold as silver usually does during periods of bullish trends in the precious metals space.
COMEX:SI1!Long
by PrepForProfit
Gold Testing Upper Pennant LineGold(GC1!) closed at $1,725.8 today from an opening price of $1,686 for a $39.8(+2.36%) gain while tagging, and coming to a stop at, the upper line of the pennant formation in the process. The pennant is a bullish price formation with the expected outcome being a break above the upper line of the pennant formation and a push back up toward $1,800. The Relative Strength Index(RSI) shows the green RSI line trading just above the 50 level and indicates bullish short-term momentum behind price. An RSI reading above 50 indicates bullish short-term momentum while a reading below 50 indicates bearish short-term momentum. The purple RSI signal line is also above the 50 level which indicates bullish intermediate-term momentum behind price. Right now the green RSI line and purple signal line are overlapping with the green RSI line looking like it wants to push back above the purple signal line. The green RSI line rising and trending above the purple signal line would indicate healthy bullish momentum. The Price Percent Oscillator(PPO) shows both the green PPO line and purple signal line above the 0 level which indicates intermediate-term bullish momentum behind price. A reading above 0 indicates bullish momentum while a reading below 0 indicates bearish momentum. When the green PPO line is above the purple signal line it indicates bullish price momentum in the short-term, the green PPO line trending below the purple signal line indicates bearish price momentum in the short-term. Right now we’re seeing a leveling off after a short-term bearish pullback in momentum, what we need to see next is for the green line to cross back above the purple line as a signal that bullish momentum has returned in the short-term. The Average Directional Index(ADX) show the green trend line above the purple trendline which indicates that the short-term trend direction is bullish. The histogram behind the green and purple directional lines is declining though which indicates that the upward trend direction has lost strength. In general during an uptrend, you want to see the green line rising above the purple line with a rising histogram. Volume has been low since late March, but is beginning to pick back up. The volume bar colors are: bright green = price and volume are higher than they were 10 days prior. Dark green = price is higher than 10 days prior but volume is lower than 10 days prior. Bright purple = price is lower than 10 days prior but volume is higher. Dark purple = price and volume are both lower than 10 days prior. The coloring is to help identify both volume and price trend. The overall view on gold remains bullish this year with the expectation that gold will test and make a new all-time high above $1,923 which was set in September 2011. In the short-term we want to see price hold above the stop-loss level in order to maintain bullish bias, as well as continue to trade above the short-term stop-loss level, with an eventual push above the upper line of the pennant formation which will likely lead to a new upside breakout in price.
COMEX:GC1!Long
by PrepForProfit
1
Gold Bullish PennantGold(GC1!) closed at $1,713.3 today for a $12.4(+0.73%) gain. Price has formed a pennant formation which given the fact that it has formed after a move to the upside makes it a bullish price formation. The expected move here is a push above the upper line of the pennant and re-test of the $1,800 level. A move below the lower line of the pennant would indicate a failed bullish pennant, with the current stop-loss for long trades resting just below there near $1,660 shown in blue. The Relative Strength Index(RSI) shows the green RSI line trading just above the 50 level and indicates bullish short-term momentum behind price. An RSI reading above 50 indicates bullish short-term momentum while a reading below 50 indicates bearish short-term momentum. The purple RSI signal line is also above the 50 level which indicates bullish intermediate-term momentum behind price. Right now the green RSI line and purple signal line are overlapping with the green RSI line looking like it wants to push back above the purple signal line. The green RSI line rising and trending above the purple signal line would indicate healthy bullish momentum. The Price Percent Oscillator(PPO) shows both the green PPO line and purple signal line above the 0 level which indicates intermediate-term bullish momentum behind price. A reading above 0 indicates bullish momentum while a reading below 0 indicates bearish momentum. While both lines are above the 0 level, they are declining with the green PPO line below the purple signal line and indicates a loss of upward momentum in the short-term. The Average Directional Index(ADX) show the green trend line above the purple trendline which indicates that the short-term trend direction is bullish. The histogram behind the green and purple directional lines is declining though which indicates that the upward trend direction has lost strength. In general during an uptrend, you want to see the green line rising above the purple line with a rising histogram. Volume has been low since late March, should price break out to a new local high above the pennant pattern we would want to see volume increase in order to sustain a move higher. The overall view on gold remains bullish this year with the expectation that gold will test and make a new all-time high above $1,923 which was set in September 2011. In the short-term we want to see price hold above the stop-loss level in order to maintain bullish bias, as well as continue to trade above the short-term stop-loss level.
COMEX:GC1!Long
by PrepForProfit
1
Zillow 50% Fib CrossZillow closed at $42.46 on Friday for a -$1.50(-3.41%) loss. Price also closed back below the 50% Fibonacci level which was briefly breached to the upside last week but failed to hold as support going into the weekend. The 50% Fibonacci level acted as resistance back in March and April highlighted by the red arrows and appears to still be resistance now. Price needs to hold above the orange trendline in order for the short-term uptrend off of the March low to be sustained. Should the orange trendline fail to hold as support, the next level to watch for price to potentially hold at is the 38.2% Fibonacci level at $37.82. A move below that level would put price back in the purple shaded area of the total Fibonacci range which is the bearish end of the Fib levels. The Relative Strength Index(RSI) is in a short-term decline with the green RSI line trending down, but remains above the centerline at 50. Above 50 indicates short-term bullish momentum, below 50 indicates bearish momentum. The purple RSI signal line is below the 50 level which indicates that the intermediate-term momentum never turned bullish. The green RSI line crossing below the purple signal line would be a bearish cross and indicate bearish momentum. The Price Percent Oscillator(PPO) shows the green PPO line and purple signal line rising above the 0 level which indicates short-term bullish momentum. Above 0 is bullish, below 0 is bearish. The green PPO line trending above the purple signal line, and both lines trending up indicates bullish momentum. The ADX shows the green +DI line above the purple -DI line which indicates a positive price trend, but the two lines look ready to cross which would indicate a shift to a bearish trend behind price. The histogram in the background indicates trend strength, which recently has all been small green bars that are trending relatively flat. Histogram bars rising indicates increasing trend strength while declining histogram bars indicate weakening trend strength. Volume is relatively low during the recent price advance, and in the overall move higher off of the selloff low volume has been decreasing which is a bearish indication. In general, you want to see rising volume in an uptrend. Overall, price is following the broader market for the most part with a current inability to hold above the 50% Fibonacci level. The trend, momentum and volume indicators below the chart are showing weakness as of Friday’s close. If price can manage to hold above the orange trend line the current uptrend will still have legs. Should price fall below the orange trendline and 38.2% Fibonacci level you can expect a new bear trend to be in play. Current stop-loss for longs should be placed just below the orange trend line, or the 38.2% Fibonacci level. Current view is neutral; bullish if price holds above the orange trendline; bearish if price breaks below the orange trendline.
NASDAQ:Z
by PrepForProfit
DOW Wedge Break and 50% Fib CrossThe Dow Jones Industrial Average(DJI) closed Friday at $23,723.7 with a loss of $622(-2.55%) to start off the new month of May. With Friday’s decline price also closed below the lower line of the rising wedge pattern after finding support at, and trending just above it, for the previous 8 trading sessions. This is the second wedge break since highlighting the pattern, but after the previous wedge break failed to materialize in a new downtrend and instead saw a move to new local highs, the lower line of the wedge pattern was redrawn to its current position. Now that we have a break of the lower wedge line again a new lower price target can be found by making a measured move from Friday’s opening price below the wedge line. This target is calculated by taking the difference between points A and B at the base of the wedge pattern and subtracting that difference from the opening price of the first candle to trade below the rising wedge pattern, which is Fridays candle since it opened and closed below the lower line of the wedge. By taking the low of candle A($18,213.7) and subtracting it from the high of candle B($22,595.1) we get $4,381.1. This value is then subtracted from the opening price of Fridays candle which was $24,120.8. $24,120.8 - $4,381.4 = $19,739.4. With the push to new local highs last week above the 50% Fibonacci level, as well as the candles switching from gray to green indicating bullish price momentum, a long trade was entered as the short-term trend shifted to bullish with a stop-loss level for the trade being placed at the last low to be made prior to price pushing higher which is shown in blue and rests at $22,941.9. As long as price is trading above the stop-loss level the long trade can be held. While price has broken below the wedge pattern and a new lower target has been calculated, we need to see a breach below the stop-loss level before placing conviction in the lower target being reached and switching back to a bearish view. The Relative Strength Index(RSI) shows the green RSI line rolling over and back down to the 50 level after hitting a high just above the 60 level last week. In general, an RSI reading above 50 indicates short-term bullish price momentum while a reading below 50 indicates short-term bearish price momentum. The purple RSI signal line continues to rise which indicates bullish momentum in the intermediate-term. The Price Percent Oscillator(PPO) shows the green PPO line rolling over after recently crossing above the 0 level, and the purple signal line has flattened out after recently crossing above 0 as well which both indicate a loss in upward price momentum. A PPO reading above 0 indicates bullish price momentum while a PPO reading below 0 indicates bearish price momentum. The green PPO line trending above the purple signal line indicate short-term bullish momentum while the green line trending below the purple line indicates short-term bearish momentum. The Average Directional Index(ADX) shows the green +DI line rolling over and close to crossing below the purple -DI line. When the green line is above the purple line it indicates that price is moving up and has a positive trend, while the green line trending below the purple line would indicate that price is in a negative trend. The histogram in the background shows trend strength i.e. when the green line is above the purple line and the histogram is rising it indicates a bullish trend that is increasing in strength. When the purple line is above the green line and the histogram is rising it indicates a bearish trend that is increasing in strength. What we’ve seen during the recent period of the green line trending above the purple line(bullish trend) is a declining histogram which indicates a weakening trend, or in this case a bullish trend without strength behind the move. For now the trend in price remains bullish since we have a series of higher highs and higher lows being made, with the blue stop-loss level being the line in the sand which would shift the trend to bearish should that level be taken out. Bearish indications I am now watching are the break of the rising wedge pattern and the move back below the 50% Fibonacci level. The indicators below the chart are showing that the recent move higher is losing steam, but haven’t flipped bearish yet. This upcoming week should give us a better idea as to where price is heading going forward.
TVC:DJILong
by PrepForProfit
Dow Jones Clears 50% Fibonacci LevelThe Dow Jones Industrial Average(DJI) closed today at $24,633 with a gain of $523(+2.2%) which came as the Federal Reserve held their third FOMC meeting of the year and left interest rates near 0%. Price now has three closes above the 50% Fibonacci retracement level which is bullish and places price back in the upper half of the total Fib range from the February highs(100% Fib) to the coronavirus selloff low in March(0% Fib level). Price has also crossed above the dashed blue line which was the previous stop-loss level on the short-trade in the expected move to down to test the selloff lows which failed to materialize. With price now making new local highs above the 50% Fibonacci level and above my previous short trade stop-loss level I am no longer in the short trade and was stopped out on yesterday’s move higher. While the current trend indicates a bullish bias, price still needs to make a move above the 61.8% Fibonacci level as a sign of uptrend continuation. I’ve redrawn the lower line of the rising wedge pattern and moved it a little lower than where it was in previous charts shared and am now watching the structure of the new rising wedge pattern. The dashed orange line represents the previous lower line of the wedge pattern for reference. Since price has now made new local highs above the blue dashed line(previous short trade stop-loss level) a new long trade can be entered here with the solid blue line as the new stop-loss level, which is roughly -6% below current price. This stop-loss level is placed at the last base, or level of demand, in price prior to new highs being made. With a series of higher highs and higher lows the short-term trend is now bullish, as is momentum based on the series of green price candles over the past three days which indicates bullish momentum behind price with my candle color algorithm. The Relative Strength Index(RSI) shows the green RSI line now above the 60 level which indicates a strong bullish momentum trend. In general, an RSI reading above 50 indicates short-term bullish price momentum while a reading below 50 indicates short-term bearish price momentum. The purple RSI signal line also continues to rise which indicates bullish momentum in the intermediate-term as well. The Price Percent Oscillator(PPO) shows the green PPO line and purple signal line both rising above the 0 level. A PPO reading above 0 indicates bullish price momentum while a PPO reading below 0 indicates bearish price momentum. Overall, the trend and momentum behind price are now bullish enough for me to switch from being neutral on the market to bullish in the short-term. While price and the lower momentum indicators are now pointing toward higher prices going forward, I’m still going to keep an eye on the rising wedge pattern that is in play, as well as potential resistance at the 61.8% Fibonacci level, but for now the chart is saying “bullish”. This week marks the end of April so I’ll be sharing some month-end closing charts this weekend as well as more detailed analysis of the market along with some fundamentals.
TVC:DJILong
by PrepForProfit
CGC Breaks Above 38.2% Fibonacci Resistance Canopy Growth Corp(CGC) closed at $17.53 gaining $1.94(+12.44%) on the trading session today. Price closed above the 38.2% Fibonacci retracement level which had been acting as resistance for the past month and is bullish move considering how long it was pegged below the 38.2% level. While this is a bullish move, we need to see price close above the 50% Fibonacci retracement level which is where price hit resistance on todays move. The 50% Fibonacci level is the midpoint between the total Fibonacci range from the January high of $25.97 to the March low of $9.00. Price trending above the 50% level indicates a bullish trend while price trending below the 50% level indicates a bearish trend. Should price see more gains tomorrow that would be a bullish sign, but a move above the 61.8% Fib level is needed to signal uptrend continuation. Worth noting is that todays price candle closed green after nearly a month of gray price candles. Green indicates that price momentum is now bullish according to my candle color algorithm. The Relative Strength Index(RSI) shows the green RSI line rising above the 50 level which is the midpoint of the total RSI range. An RSI reading above 50 indicates short-term bullish momentum while a reading below 50 indicates short-term bearish momentum. The RSI crossed above the 60 level today which indicates that there is strong momentum behind price right now. The purple RSI signal line is also rising which indicates intermediate-term momentum is bullish as well. In general, you want to see the green RSI line rising above the purple signal line, and for both lines to be above the 50 level as a sign of bullish momentum. The Price Percent Oscillator(PPO) shows the green PPO line rising above the purple signal line, both lines trending up and both lines crossing above the 0 level. This indicates bullish momentum in the short-term as a PPO reading above 0 is considered bullish while a PPO reading below 0 is considered bearish. The Average Directional Index(ADX) show the green +DI line rising above the purple -DI line which indicates positive direction behind price when comparing recent highs to recent lows in price. The histogram behind the DI lines is still low which indicates relatively weak strength behind price. In general during a price move higher, you want to see the green +DI line above the purple -DI line and the histogram bars rising above the white dotted line at the 25 level as an indication of bullish strength behind price. The volume indicator shows that volume today was at its highest level since March 26th, and also in a recent trend of increasing volume. Rising volume as price moves higher is a bullish sign. Today’s volume bar is bright green and indicates that volume and price are both higher than they were 10 days ago and is considered a bullish price/volume day. Overall, the move today is bullish as price broke above 38.2% resistance, the lower momentum and trend indicators are all bullish, and volume is increasing over the past few days and broke to a new 1-month high today. The tentative stop-loss level for long trades is shown in blue and is just below the most recent consolidation lows prior to the breakout today.
CLong
by PrepForProfit
Gold Daily Bullish Above 23.6% Fibonacci LevelGold(GC1!) closed at $1,735 on Friday for a -$9.80(-0.56%) loss on the trading day, but rose +$42.6(+2.52%) on the week from an opening price of $1,693 on Monday. Price is trading above the 23.6% Fibonacci retracement level which is the upper end of the total Fibonacci range from the $1,450 low(0% Fib) to the $1,788 high(100% Fib) and is the most bullish level for price to be above and indicates that price is in an uptrend. The current stop-loss level for long trades is just above the 38.2% Fibonacci level shown in blue which is where the last selloff attempt was stopped before price rose to its current level. In order for the short-term uptrend to remain intact, price needs to take out the local high at $1,788. For now, as long as price remains above the 38.2% Fibonacci level long trades can be held with the expectation that price will continue to rise. The Relative Strength Index(RSI) is trading above the 50 level and indicates bullish short-term momentum behind price. An RSI reading above 50 indicates bullish short-term momentum while a reading below 50 indicates bearish short-term momentum. The purple RSI signal line is also above the 50 level which indicates bullish intermediate-term momentum behind price, but is trending flat which means intermediate momentum has lost strength. The green RSI line trending above the purple signal line is also bullish and indicates that there is overall bullish momentum. The Price Percent Oscillator(PPO) shows both the green PPO line and purple signal line above the 0 level which indicates intermediate-term bullish momentum behind price. A reading above 0 indicates bullish momentum while a reading below 0 indicates bearish momentum. While both lines are above the 0 level, they are overlapping which indicates that short-term momentum has stalled out. A short-term bullish reading is when the green PPO line is trending above the purple signal line and both lines are trending up. With the lines overlapping it indicates that short-term momentum is at risk of crossing bearish, but hasn’t occurred yet. The overall short-term view on the daily chart is bullish as the recent candles are green which indicates bullish price momentum behind price, as well as a reading above the 23.6% Fibonacci level indicating that the short-term trend is also bullish. I’d like to see momentum pick up in the indicators below as both the RSI and PPO are indicating a loss of upward momentum in the short-term. For now the 38.2% Fib level needs to hold as support to keep the trend bias bullish, while a move above the local high at $1,788 would likely be a signal of uptrend continuation.
COMEX:GC1!Long
by PrepForProfit
Dow 50% Fibonacci ResistanceThe Dow Jones Industrial Average(DJI) closed Friday at $23,775 with a gain of $260(+1.11%) on the day, but loss of $320(1.33%) on the week with a Monday open of $24,095 and a Friday close of $23,775. Monday saw price fall back below the 50% Fibonacci retracement level after briefly trading and closing above it on Friday(17April) and then was unable to move back above the 50% level this past week. Price has essentially been finding resistance at the 50% Fibonacci level for the past 12 trading sessions and the longer price fails to move above this level the more likely it is to be rejected from it. The 50% Fibonacci level represents the halfway point between the all-time high of $29,568(100% Fib) made in February and the coronavirus selloff low of $18,213.7(0% Fib) made in March and defines whether price is in a bullish or bearish trend. Price trading below the 50% level indicates a bearish bias for price, while trending above the 50% level indicates a bullish bias. Price broke below the rising wedge pattern on Tuesday(21 April) which was expected coming into the trading week based on resistance at the 50% Fibonacci level last week. With price breaking below the rising wedge pattern a measured move could then be made to find a lower price target. The lower target of $18,983.9 is calculated by taking the difference in price at the base of the rising wedge pattern which are points A and B($22,595.1 - $18,213.7 = $4,381.4) and then subtracting that difference from the opening price of the first candle to open below the lower line of the rising wedge pattern. The difference between points A and B is $4,381.4 which is the low of candle A and the high of candle B. This is then subtracted from the opening price of $23,365.3 on 21 April which was the first candle to open below the lower line of the rising wedge and gives a lower price target of $18,983.9. ($23,365.3 - $4,381.4 = $18,983.9) With price breaking below the rising wedge pattern after finding resistance at the 50% Fibonacci level a short trade could be entered with the expectation that price will continue to have a bearish bias and ultimately test the lower target of $18,983 which could be viewed as a take-profit level on the short trade. The stop-loss for the short trade is shown in blue and is set at $24,300 which is just above the local high of $24,264 made on 17 April. As long as price doesn’t move above that local high the short trade can be held with the stop-loss level eventually being moved lower as price moves lower. The main levels to watch this week are the 38.2% and 50% Fibonacci levels. I’m expecting the 50% Fibonacci level to continue acting as resistance while the 38.2% level is the first level of support that I would like to see be broken to the downside as a move below that level would put price back into a bearish trend. The Relative Strength Index(RSI) shows the green RSI line trending just above the 50 level which is the midpoint of the total RSI range(0-100). An RSI reading above 50 indicates short-term bullish price momentum while a reading below 50 indicates short-term bearish price momentum. The purple RSI signal line has leveled out after recently moving higher which indicates that intermediate-term momentum is losing strength. The Price Percent Oscillator(PPO) shows the green PPO line has leveled off after recently crossing back above the 0 level. A PPO reading above 0 indicates bullish price momentum while a PPO reading below 0 indicates bearish price momentum. The purple signal line hasn’t moved above the 0 level which means that the short-term momentum behind price has yet to turn completely bullish. The green PPO line rising above the purple signal line indicates that there is short-term bullish momentum, but in generally you want to see both of these lines rising together as a sign of strength behind price, right now both are leveling out. The current view on price remains neutral with a bearish bias due to the recent breakdown of the rising wedge pattern, combined with the gray/neutral price candles and the failing of price to move above the 50% Fibonacci retracement level. The expected move going forward is a move lower down to the target area shown in red.
TVC:DJI
by PrepForProfit
2
Dow Jones Testing 50% Fibonacci Level After Wedge BreakThe Dow Jones Industrial Average(DJI) ended flat, gaining $39.4(+0.17%) in today’s trading session with a close at $23,515. Price has created two small doji candles over the past two days with today’s doji candle topping out right at the 50% Fibonacci retracement level before price fell back down and closed near the days opening price. A doji is a candle with a small body and small upper/lower wicks and represents trader indecision, with price closing at, or near, where it opened which indicates that neither bulls nor bears were able to move price in either direction with conviction. Price is finding resistance at the 50% Fibonacci retracement level which has acted as price resistance for the past week and a half. The 50% Fibonacci level represents the halfway point between the all time high(100%) and the coronavirus selloff low(0%) and defines whether price is in a bullish or bearish trend. Price trading below the 50% level indicates a bearish bias for price, while trending above the 50% level indicates a bullish bias. The past three daily candles are all gray which indicates no momentum behind price according to my candle color momentum algorithm, so price is indicating that there is no strength right now as the 50% Fibonacci level is being tested. The Relative Strength Index(RSI) shows the green RSI line trending just above the 50 level which is the midpoint of the total RSI range. An RSI reading above 50 indicates short-term bullish price momentum while a reading below 50 indicates short-term bearish price momentum. The purple RSI signal line has leveled out after recently moving higher which indicates that intermediate-term momentum is losing strength. The Price Percent Oscillator(PPO) shows the green PPO line has leveled off after recently crossing back above the 0 level. A PPO reading above 0 indicates bullish price momentum while a PPO reading below 0 indicates bearish price momentum. The purple signal line hasn’t moved above the 0 level which means that the short-term momentum behind price has yet to turn completely bullish. The green PPO line rising above the purple signal line indicates that there is short-term bullish momentum, but in generally you want to see both of these lines rising together as a sign of strength behind price, right now both are leveling out. The current view on price remains neutral with a bearish bias due to the recent breakdown of the rising wedge pattern, combined with the gray/neutral price candles and the failing of price to move above the 50% Fibonacci retracement level. The expected move going forward is a move lower down to the target area shown in red. This target area is a measured move based on the base of the rising wedge pattern shown by points A and B. After price broke below the rising wedge, the difference in price between points A and B was subtracted from the opening price of the first candle to break below the wedge which gives us a lower target down near $19,000, or about -18% below current price. Once price broke below the rising wedge, and the red dashed line(previous stop-loss level for long trades) a short trade was entered with the new stop-loss level shown in blue dashes. As long as price is trading below the blue dashed line at the local highs the short-trade can be held. Should price break above the 50% Fibonacci level and take out the recent highs the short trade will be closed and a new long trade could be entered.
TVC:DJI
by PrepForProfit
6
Dow Jones Rising Wedge BreakdownThe Dow Jones Industrial Average(DJI) moved lower for a second consecutive day, losing $631.6(-2.6%) in today’s trading session with a close at $23,018 Price also broke below the rising wedge pattern which is a move that I’ve been expecting ever since highlighting the bearish wedge pattern last week. Along with the wedge breakdown, price also closed below the local lows(red dashes) which was the recommended stop-loss level for long trades. It’s safe to assume at this point that the 50% Fibonacci retracement level was a strong resistance level and indicates that the month-long rally off of the coronavirus selloff low(0% Fibonacci level) was a bear market rally rather than a return to a bull market. Now that price has violated the lower line of the wedge pattern a measured move can be made in order to find a lower target that price can be expected to reach going forward. The measured move is calculated by taking the difference from low of candle A to the high of candle B, which is the base of the wedge pattern and comes out to $4,381.4. Once you have this measurement, subtract it from the opening price of the first candle to open below the lower line of the wedge pattern, which is today’s price candle that had an opening price of $23,365.3. By taking $23,365.3 - $4,381.4 we get $18,983.9 which is roughly -18% below todays closing price and is now the lower price target to watch for and expect going forward. Now that the anticipated move is a move lower we can switch from a long trade to a short trade, with the new stop-loss level for the short trade being at the local high(dashed blue). As long as price doesn’t make a new high we can remain short and then lower the stop-loss level as price moves lower with the expectation that the lower target shown in red will be met. The Relative Strength Index(RSI) shows the green RSI line beginning to cross back below the 50 level which is the middle of the total RSI range. An RSI reading above 50 indicates short-term bullish price momentum while a reading below 50 indicates short-term bearish price momentum. The purple RSI signal line is still moving higher, but this line is calculated using a longer lookback period than the RSI line therefore it is slower to react to short-term price movements. The green RSI crossing below the purple signal line would indicate an increase in short-term bearish momentum and would be a sell signal confirmation move. The Price Percent Oscillator(PPO) shows the green PPO line levelling out and beginning to roll over after just barely crossing into bullish territory above the 0 level. A PPO reading above 0 indicates bullish price momentum while a PPO reading below 0 indicates bearish price momentum. The expected move here is a continued push lower in the PPO and then an eventual cross below its purple signal line which would be a bearish cross and indicate that the short-term momentum behind price is bearish. The current view on price remains neutral even though we have a bearish break of the rising wedge pattern and a move below the previous stop-loss level, and are now short with a lower price target. Today’s price candle closed gray which indicates no momentum behind price. Price is also still above the 38.2% Fibonacci level which could potentially act as support. In order to take on a bearish view here I’d like to see price move below the 38.2% level and back into the purple shaded region of the total Fibonacci range, as well as a further decline in the RSI and PPO.
TVC:DJI
by PrepForProfit
1
Dow Testing Wedge Support & Closes Back Below 50% Fib LevelThe Dow Jones Industrial Average(DJI) lost $592.1(-2.4%) for a close at $23,560 as the oil market took center stage and commanded most of the business news cycle today. The Dow is now testing the lower line of the rising wedge pattern and has now moved back below the 50% Fibonacci retracement level as well after managing to close above it on Friday. This move indicates that the 50% Fibonacci level is likely still resistance rather than support seeing as how price was unable to hold above this level for more than one trading session. I normally look for at least three closes above a previous resistance level before considering it to have turned into a support level. The anticipated move here remains to be a breakdown below the rising wedge and am of the opinion that the recent rally off of the coronavirus selloff low is a bear market rally. The current stop-loss level for long trades remains in place near $23,000. Should price fall below that level a new downtrend will likely form; the first level to watch for potential support on a new downtrend is the 38.2% Fibonacci level at $22,551, but odds are if price reverses here the 38.2% level will be violated to the downside as well. The tentative price target on a reversal right now is in the $19,000 range, or roughly -$4,600(-20%) from today’s closing price of $23,560. The Relative Strength Index(RSI) shows the green RSI line holding above the 50 level which indicates short-term bullish momentum behind price. An RSI reading above 50 indicates bullish price momentum while a reading below 50 indicates bearish price momentum. The purple RSI signal line has also turned up which indicates that intermediate price momentum is gaining strength, this line also needs to move above the 50 level in order for the intermediate price momentum to be considered bullish. The Price Percent Oscillator(PPO) shows the green PPO line rising above the purple signal line which indicates short-term bullish momentum for price. The green PPO line is also beginning to cross above the 0 level which indicates that the intermediate momentum behind price is also beginning to turn bullish. A true bullish PPO reading is when both the green PPO line and purple signal line are above the 0 level. The overall view on the Dow Jones remains neutral here, but a breach below the rising wedge pattern, and stop-loss level, will shift the view back to bearish.
TVC:DJI
by PrepForProfit
1
Dow Jones Crosses 50% Fib Level Within Bearish Rising WedgeThe Dow Jones Industrial Average(DJI) gained $704(+2.9%) on Friday and saw price move above the 50% Fibonacci retracement level which is the midpoint of the total Fibonacci range from the all-time high made in February and the coronavirus selloff low made in March. Price moving above the 50% Fibonacci level represents price regaining half of the losses seen during the selloff. While a move above the 50% retracement is bullish, price is still trading within a rising wedge pattern which is a type of bearish chart pattern that tend to see price ultimately break below the lower line of the wedge and move lower. Friday also saw a change in color candle from a recent trend of gray to green. Gray candles indicate that price is neutral, or has no identifiable trend. The shift to green indicates that price shifted to short-term bullish momentum in my price candle algorithm. Going forward we need to see price move above the upper line of the wedge pattern to keep the current uptrend intact, and then above the 61.8% Fibonacci level as a sign of uptrend continuation. Price needs to move above the 61.8% Fibonacci level in order for a “return to normal” in the Dow. Should price find resistance at the upper wedge line and move back below the 50% Fibonacci level it would likely indicate that the recent rally off of the March low was a bear market rally rather than a shift to a bullish trend. A breach below the lower wedge line would likely mean that a re-test of the March low is ahead. Now that price has made a new high and a push above the 50% retracement level, my stop-loss level for long trades has been moved higher from the 38.2% Fibonacci level to just below the local lows made last week. This level represents the last base, or area of support, prior to the new high and is the last level of price demand by traders prior to the recent price advance above the 50% Fibonacci level. This stop-loss level is also just below the lower wedge line and is the last level we want to be long stocks should price reverse and fall out of the wedge. A move below this level would also signal that traders no longer see value at that level as they did last week, whether due to a shift in trend or fundamentals in the market. The Relative Strength Index(RSI) shows the green RSI line holding above the 50 level which indicates short-term bullish momentum behind price. An RSI reading above 50 indicates bullish price momentum while a reading below 50 indicates bearish price momentum. The purple RSI signal line has also turned up which indicates that intermediate price momentum is gaining strength, this line also needs to move above the 50 level in order for the intermediate price momentum to be considered bullish. The Price Percent Oscillator(PPO) shows the green PPO line rising above the purple signal line which indicates short-term bullish momentum for price. The green PPO line is also beginning to cross above the 0 level which indicates that the intermediate momentum behind price is also beginning to turn bullish. A true bullish PPO reading is when both the green PPO line and purple signal line are above the 0 level. The overall view on the Dow Jones remains neutral, even with price crossing above the 50% Fibonacci level which has put price back in a bullish trend. The reason for remaining neutral is the bearish rising wedge that has formed in the chart. Until price makes a decisive move above the wedge the risk of a reversal remains in play.
TVC:DJI
by PrepForProfit
Dow Jones 50% Fib Resistance and WedgeThe Dow Jones Industrial Average(DJI) lost $445(-1.8%) today as price continues to find resistance at the 50% Fibonacci retracement level which is the halfway point between the all-time high of $29,568 made in February and the coronavirus selloff low of $18,213 made in March. Price has been capped at the 50% Fibonacci level for the past 6 trading sessions as traders struggle to move price higher on negative economic data releases, most notably today with the Empire State Manufacturing data release which showed new orders and shipments collapsing to their lowest reading on record for -57 point decline to -78.2, and retail sales data which was also released today and showed a -8.7% decline which was also a new record. These data releases are a sign of what to expect going forward as the recent numbers mainly reflect March data, while the bulk of the negative coronavirus affects have been witnessed in April. Q1 2020 is already looking bad judging by the earnings releases that started rolling out this week, and since April wasn’t included in the data we can expect Q2 of this this year to be worse than Q1, especially since we still haven’t hit a peak in coronavirus cases or states lift their shelter-in-place orders which is weighing heavily on the economy due to non-essential businesses remaining closed and continuing to layoff workers. From the selloff low through today, the Dow Jones has created a rising wedge pattern which is a bearish pattern that begins wide at the bottom and contracts, or tightens, as price moves higher. The apex of the current pattern is forming at the 50% Fibonacci retracement level which indicates that if price doesn’t move above the 50% level soon a breakdown out of the rising wedge is likely, possibly even tomorrow as the next set of initial unemployment claims data is set to be released. The past three weeks have seen 3.3, 6.8 and 6.6 million people file for unemployment bringing the 3-week total to just shy of 17 million people joining the ranks of the unemployed. The current average forecast for tomorrows release is expected to show at least another 5 million people filing for unemployment for the first time for the week ending Friday, April 10th. A measured move can be made once/if price breaks down and out of the rising wedge pattern which will give us a price target to look for potential support, but for now a rough estimate would be a -$4,300(-18%) decline back down near the coronavirus selloff low which I’ve already been forecasting a re-test of. The Relative Strength Index(RSI) shows price still above the 50 level but continuing to fail to move higher as price hesitates at the 50% Fibonacci level. An RSI reading above 50 indicates bullish price momentum, while a reading below 50 indicates bearish price momentum. The Price Percent Oscillator(PPO) shows the green PPO line rising above the purple signal line which indicates short-term bullish momentum for price, but both lines remain below the 0 level which indicates that overall momentum remains bearish. A bullish PPO reading is when both the green PPO line and purple signal line are above the 0 level. The overall view on the Dow Jones remains neutral, but the resistance being seen at the 50% Fibonacci level as well as the rising wedge pattern that has formed indicate that price may be close to breaking bearish again. My previous stop-loss level was down near the 23.6% Fibonacci retracement, but has now been raised up to the 38.2% Fibonacci level due to 50% Fibonacci resistance and the bearish rising wedge pattern. My opinion is that this has been a bear market rally off of the coronavirus selloff low and that a second wave down is probable, especially now that we are beginning to see economic data and earnings from the tail end of Q1 which is when the coronavirus damage began, therefore the stop-loss level has been raised and represents the best level to lock-in gains if you’ve bought the dip. A move below the stop-loss level and 38.2% Fibonacci retracement level would also put price back in the lower range of the total Fibonacci area and is where price is most susceptible to further weakness.
TVC:DJI
by PrepForProfit
3
Gold Testing $1,800 While the stock market isn’t seeing the strong bounce that the Federal Reserve was trying to manifest via trillions of freshly printed dollars thrown at the bond and credit markets, gold is loving the massive increase in the money supply. Price is currently testing highs not seen since October 2012 near $1,800 which is where the current resistance level rests. I’ve been expecting a re-test of the all-time high of $1,923 by the end of the year, but at this pace we may see it within the next month or two. After finding recent support at the 61.8% Fibonacci level which indicated uptrend continuation, price has now pushed above the 78.6% Fib level which is the most bullish of the Fib levels for price to be trading above. As long as price remains above the 78.6% level the trend can be expected to continue upward. Any pullback that holds above the 61.8% Fib level can be viewed as a bullish pullback and a buy opportunity. The Relative Strength Index(RSI) shows the green RSI line at the 75 level which indicates strong momentum behind price. Above 50 is bullish, above 60 indicates strong bull momentum. The purple signal line is also above 50 and rising which indicates that the intermediate momentum trend is bullish along with the short-term RSI momentum trend. The Price Percent Oscillator(PPO) shows the green PPO line rising above the purple signal line, with both lines above the 0 level. This indicates that overall momentum behind price is bullish. As long as the green PPO line is above the purple signal line the short-term momentum will remain bullish. The overall view on gold remains bullish with the expectation of a new all-time high above $2,000 being made this year.
COMEX:GC1!Long
by PrepForProfit
Dow Jones 50% Fibonacci ResistanceThe Dow Jones opened at $23,698 and closed at $23,390 today for a -$328(1.4%) loss after a long holiday weekend, and after a new $2.3 trillion round of corporate bond bailouts announced by the Federal Reserve this past Thursday. Price failed to move above the critical 50% Fibonacci retracement level which is where price also found resistance on Thursday. The 50% Fib level is the midpoint of the total Fibonacci range from the all-time high made in February and the coronavirus selloff low made in March. Price failing to move above this 50% Fib level indicates that the current rally off of the March low should still be viewed as a bear market rally and that the low made in March is at risk of being tested again and/or breached to the downside. With todays decline, price has formed a pattern similar to a bearish evening star reversal pattern at the 50% Fib level. This is a 3-candle pattern that consists of an initial move up(1), a small doji candle(2) and then a reversal to the downside(3). The pattern shown doesn’t quite meet the requirement to be a true evening star reversal pattern as today’s decline(3) didn’t close lower than the midpoint of the first candle of the pattern, but it is close and demands attention. For confirmation of a reversal, tomorrow’s price needs to move lower than today’s close and preferably lower than the midpoint of candle 1. Should we see a move lower tomorrow, the 38.2% Fib level is the first level of support to watch for on a reversal. A move back below the 38.2% Fib level would put price back in the lower bearish range of the Fib retracements(purple-shaded area) and shift the current view on price from neutral to bearish. From there, the next level of support to watch is the 23.6% Fib which is also where the current stop-loss level is. Should price violate that level, all long trades should be exited with the expectation that price is going to make new lows, meaning that short-trades can be entered. The Relative Strength Index(RSI) shows the green RSI line still above the 50 level which indicates bullish momentum, but is seeing a small pullback as price momentum has stalled at the 50% Fib level in the price chart. A move back below the 50 level would indicate that price is building bearish momentum. The Price Percent Oscillator(PPO) continues to show the green PPO line rising above its purple signal line which indicates short-term bullish momentum, but both lines remain below the 0 level which indicates that overall momentum behind price is still bearish. The overall view on price remains neutral here. A bullish view would require a price move above the 50% Fib level while a price move back below the 38.2% would shift my outlook back to bearish which is the move I’m expecting going forward.
TVC:DJI
by PrepForProfit
1
DOW Jones 38.2% Fib HoldThe Dow Jones finished up $779(3.4%) on Wednesday with an opening price of $22,893 and closing price of $23,433. Price held above the 38.2% Fibonacci retracement level which is acting as short-term support after previously being a resistance level, but price remains below the 50% Fib which is the middle of the total Fib range from the February high to the coronavirus selloff low in March. A move above the 50% Fib would mean price has regained 50% of the losses during the record-breaking selloff and be an indication that traders are becoming more bullish on price and that the worst is behind us. A price move back below the 38.2% Fib level would be a sign of weakness or hesitation by traders to push price to new highs, while a move below the 23.6% Fib level would be bearish and also take out our higher low(stop-loss) level and be an indication that price is likely to retest the low seen in March with the possibility of making new lows. For this reason, the Higher Low at the 23.6% Fib level is where stop-loss orders should be placed if currently long this market. The Relative Strength Index(RSI) is leveling off after recently crossing above the centerline at the 50 level. This indicates that upward momentum has stalled as price is testing the 50% Fibonacci level. An RSI reading(green line) above 50 indicates bullish momentum behind price while an RSI reading below 50 indicates bearish momentum. The Price Percent Oscillator(PPO) continues to rise with the green PPO line above its purple signal line which indicates short-term bullish momentum, but both lines remain below the 0 level which indicates overall bearish momentum. A PPO reading below 0 indicates bearish momentum while a PPO reading above 0 indicates bullish momentum. The current price candle is gray which indicates neutral, or no momentum behind price in my price candle algorithm. The overall view on price remains neutral here as price holds above the 38.2% Fib and below the 50% Fib. A move above the 50% Fib would be bullish, while a move below the 38.2% would begin to shift the view back to bearish.
TVC:DJI
by PrepForProfit
Dow Jones Higher Low, Higher High w/ 38.2% Fib BeatDow Jones Futures are currently up nearly $900(4%) to $23,400 and has made a push above the 38.2% Fibonacci retracement level and out of the bearish lower levels of the total Fib range. With price moving above the 38.2% Fib level, price has also created a higher high and higher low which indicates a short-term uptrend so the view has now shifted from bearish to neutral with a bullish bias. Short-term resistance is expected to come in at the 50% Fibonacci level near $28,300, while a push above that level would put price back in the bullish half of the total Fib range. A bullish pullback from here would be any hold above the 38.2% Fib level with secondary support being at the 23.6% Fib. Going forward, price will remain in an uptrend as long as the 23.6% level isn’t violated. With price making a higher high and higher low, the stop-loss level for long trades can now be moved from the previous doji candle last week to just below the higher low area. This higher low was at the 23.6% Fib level which acted as support for the past 8 sessions and represents an area of price demand prior to new highs being made overnight. The Relative Strength Index(RSI) has now begun to move above the centerline at the 50 level. In general, an RSI reading above 50 indicates bullish momentum while an RSI reading below 50 indicates bearish momentum. A sign of bullish momentum continuation going forward would be a move above the 60 level. The Price Percent Oscillator(PPO) continues to show the green PPO line rising above its purple signal line which indicates short-term bullish momentum. Going forward, the PPO needs to rise above the centerline at the 0 level in order for the intermediate to long-term momentum to shift bullish. Overall, price is looking better here than it has at any other time over the past 5 weeks. A move above the 50% Fib level is critical here for bulls to maintain bullish momentum, with a move above the 61.8% Fib level needed to put price back into a true bullish trend. I was previously expecting a move below the 23.6% Fib level, but with changing technicals comes a change in view, and right now traders appear to be bullish according to the technicals.
CBOT_MINI:YM1!
by PrepForProfit