The S&P 500 continues to be off the chain, as the markets continue to see a celebration of a potential opening of the economy despite the fact that the economies are still going to be sluggish to say the least. At this point, I believe that the market will continue to try to grind higher, but there is a massive amount of resistance between here and the 3100 level, so it is not going to be easy. The question now is whether or not the market can continue the narrative of “everything’s getting better”, or will they pay attention to economic figures such as the Pending Home Sales drop of 35% year-over-year during the early part of the session?
S&P 500 Video 29.05.20
We are in a bear market and have seen a massive bounce. That being said, the 3000 level is going to continue to be crucial so if we were to break back down below it certainly would be somewhat of a negative headwind. However, if we can break above the 3100 level then there is almost nothing to keep this market from going to the all-time highs it is difficult to say right now, but clearly the buyers are pressing the issue. If the sellers do not get involved rather soon, we will eventually see that explosive break out and potential “blow off top” before the market starts the price and the reality of 40 million jobs lost, which would certainly have an effect on an economy that is driven by the 70% consumption. If the consumer does not have a job, it is not consuming.
Silver markets are going back and forth overall between the $18 level on the top and the $17 level on the bottom. With that being said, it is worth paying attention to due to the fact that silver has a lot of meaning when it comes to the overall economy. After all, silver is a major industrial metal, and therefore if there is an explosion in the industrial sector, then by all means it looks like the demand for silver will continue to be strengthening.
SILVER Video 29.05.20
However, there is also the precious metals trade, due to the fact that central banks around the world continue to print money as fast as they can. Here that sound in the background? That is the sound of the printing press is going full tilt, and that of course helps the idea of metals. However, silver plays a second fiddle to gold, and therefore you need to look at that as reality.
To the downside, if we break the $17 level it is likely that the 200 day EMA and the 50 day EMA both will come into play and offer support. I think that silver needs to pullback drastically, and as a result we should see some more position building to the upside. However, if we do break above the $18.25 level then it is likely that we go looking towards the $19 level above. If we managed to break above there, then the market is likely to go towards the $20 level after that. Expect volatility regardless.
The West Texas Intermediate Crude Oil market has initially pulled back a bit during the trading session on Thursday, but then turned around to show signs of strength again as continuing optimism floods into the market. That being said, it is quite interesting considering that there is a gap above and it is likely that it will probably get filled given enough time. That does not mean that it will be easy, and I do think that once we get to the top of the gap, closer to the $41 level, there is the 200 day EMA coming into focus there as well, so I think that is about as far as that goes. To the downside, there is plenty of support at the $30 level and of course the 50 day EMA.
Crude Oil Video 29.05.20
Brent markets have also pulled back slightly but then showed signs of life again as the market continues to see a lot of support based upon the 50 day EMA. Ultimately, this is a market that I think continues to see a lot of noise, but it is choppy to say the least and therefore you have to be overly cautious. The $40 level above starts to begin of a major gap that extends to the $45 level, so it is likely that we could see a bit of interest in trying to fill that as well. To the downside, it is not until we break the $30 level that uncomfortable shorting. Granted, economies are opening but demand is going to be weak.
Natural gas markets continue to be noisy, as we had a relatively tight trading session on Thursday. Ultimately, the market is likely to see more noise, as there are multiple factors out there that can continue to push this market wildly. The 50 day EMA of course attracts a lot of attention, and therefore it will be interesting to see where we resolve this issue. Having said that, I think that is likely that we will see a lot of erratic behavior in the market.
NATGAS Video 29.05.20
To the downside I think that the $1.80 level is likely to offer a certain amount of support, so I am looking for short-term pullbacks in order to buy the contract for short-term trades only. Ultimately, the market is trying to build a larger basing pattern from what I can see, as economy start to open up again. Ultimately though, the question will come down to whether or not the demand finally picks up enough to take out the massive oversupply. We also have bankruptcies coming so that could help as well. We are at extremely low levels so I do anticipate that the market will try to bounce but it is not going to be extremely easy to deal with.
With that in mind, even if we do break down below the $1.80 level, it is likely that we will see the previous gap at the $1.70 level also offering it. If we can break above the $2.00 level, then it is likely that the market will then go looking towards the 200 day EMA just above.
Gold markets continue to see a lot of volatility, as we approach the $1750 level yet again. After forming a major hammer for the trading session on Wednesday, it makes sense that we bounced a bit from there. The 50 day EMA has also offered support, so therefore it makes sense that buyers would have been attracted to that level as well. Furthermore, it is formed right about the $1700 level. That being said, if we were to turn around a break down below the hammer, then it would be extremely negative. At this point in time, it is likely that the market will offer quite a bit of support underneath there though, so I find that to be very unlikely to happen. If it does, then I would look to “reset” to the upside.
Gold Price Predictions Video 29.05.20
The $1600 level will be massive support again, if we do get down there due to the fact that the 200 day EMA. Ultimately, this is a market that continues to see a lot of buyers on dips and quite frankly it should, due to the fact that the central banks around the world continue to print currency as fast as possible, and of course there are a lot of economic concerns out there when it comes to the global economy, trade, US/China relations, and a whole host of other things. With all of this, it makes sense that gold should be one of the better performing assets.
The US dollar has gone back and forth during the trading session on Thursday, reaching towards the ¥108 level yet again. That is an area that has been quite difficult for the market to get out of, as the ¥107 level has been massive support. Ultimately, this is a market that continues to be difficult to deal with for anything more than a short-term trade. Ultimately, the market will make a decision, but right now it is only deciding to go sideways. This makes quite a bit of sense that the market would do this, simply because the US dollar and the Japanese yen are both considered to be safety currencies, so that will continue to be a major issue to deal with.
USD/JPY Video 29.05.20
Looking at this chart, we are also right at the 50 day EMA, so that of course causes a lot of attention to be paid to the market there as well. Ultimately, this is a market that I think is eventually going to make an impulsive move, and when it happens it will be obvious. Those obvious impulsive candlestick should give us a heads up as to what to do next, so I will be watching that. Ultimately, this is a market that I think will eventually offer great returns, but we are nowhere near that right now. Short-term I believe that this is a market that simply offers a lot of back-and-forth trading which is perfect if you are a short timeframe type of person. Otherwise, you will probably have to wait.
The British pound has initially fallen during the trading session on Thursday but then rallied after the jobless numbers came out in the United States. Quite frankly, the US stock market seems to be rallying at any chance it can, and that tends to work in the favor of some of the riskier currencies such as the British pound. However, the UK has a whole slew of problems out there just waiting to happen so therefore we have to be overly cautious about how we play this market. That being said, I do believe that the 50 day EMA above will cause quite a bit of resistance, and the 1.2350 level is likely to be a difficult barrier to break above.
GBP/USD Video 29.05.20
To the downside, if we were to break down below the 1.21 handle, then this market could go down to the 1.20 level rather quickly. After that, then the British pound goes looking towards the 1.1750 level. There is a significant amount of volatility coming our way, so that being the case it is likely that we will see a lot of back and forth, and quite frankly an explosive move could be coming. In the meantime, I expect to see a lot of choppy behavior, so keep your position size reasonably small. Risk continues to be for sudden whipsaw trading due to the rush of headlines that can come at any moment. Quite frankly, you need to be cautious and protect your trading capital more than anything else at this juncture.
The British pound has gone back and forth around the ¥132 level against the Japanese yen during trading on Thursday, as we got a slew of economic numbers out of the United States, none of which of course were good. That being said, Wall Street celebrates these poor numbers as it has for a while, driving stocks higher. This has kept risk sensitive pair is a bit levitated, and that is part of what we have seen here.
That is a bit of a conundrum for markets, because some people are paying attention to the potential opening up of economies and therefore the “risk on trade”, while other people are focusing on the fact that the future may not be as bright as those other people think. At this point, if the market breaks down below the lows of the trading session on Thursday it is highly likely to go looking towards ¥131, and then eventually the ¥130 level.
GBP/JPY Video 29.05.20
To the upside, the 50 day EMA will more than likely cause a lot of resistance so as long as we can stay below that read moving average on the daily chart, I do believe that there are plenty of sellers out there willing to push to the downside. The Japanese yen of course is a safety currency and that helps, especially considering that we not only have poor economic numbers, but we also have the US/China trade situation deteriorating yet again, which of course will be good for risk appetite worldwide. At this point, the trend is still lower, so that is how we have to look at this.
The Euro broke higher during the trading session on Thursday, reaching towards the 200 day EMA. That of course is a major technical indicator, and of course it will attract a lot of attention. Quite frankly, it comes down to whether or not people are going to pay attention to the Federal Reserve trying to kill the greenback, or are they going to pay attention to the European Union taking on federalized debts. That of course makes people more willing to invest in the European Union when they know that Germany is going to backstop everybody, but it also shows a lot of the major underlying issues with the European Union.
EUR/USD Video 29.05.20
Quite frankly, I think we are at a major inflection point, and the question is whether or not the market can cleanly break above the 200 day EMA. The daily close for Thursday is going to be crucial, and quite frankly if it is above the 1.1050 level, it is likely that the Euro continues to go much higher. When you look at the monthly charts, there are a couple of hammers, but there is also a major neutral candlestick due to the noise from February. In other words, while it does look like we are trying to form some type of base, the reality is that the Euro is a complete mess right now, so it is exceedingly difficult to trade with any type of confidence. Either way, I think the one thing you can probably count on is a lot of noise in this pair, which is quite typical for the way it behaves.
The Australian dollar is flirting with breaking out for a longer-term trend change. That being said, there are a slew of problems out there that could work against it, so quite frankly I am a bit cautious about going long here. What I need to see is a daily close above 0.67 to be convinced that we are going to continue to see upward pressure. It is kind of astonishing if you think about it, as the US/China trade situation deteriorates, this will certainly have a negative effect on the Australian dollar. However, it does not seem to be something that people are willing to pay attention to at the moment, but when they do, I suspect that could cause a lot of economic pain.
AUD/USD Video 29.05.20
If we were to break down below the candlestick from the Wednesday session, that turns that candlestick into a “handyman” which also had formed right at the 200 day EMA, a very bleak and negative sign to say the least. However, if we get that breakout to the upside and the daily close above the 0.67 handle, it is highly likely that we go looking to the 0.70 at the very least, perhaps even higher than that. That being said, the market looks extraordinarily stretched, but I have thought that for a couple of weeks to be quite honest. The question now is whether or not we can continue to push higher? So far, it certainly has been resilient, but one would have to think that this rally is getting “long in the tooth.”
The S&P 500 looks very stretched at this point, as it had initially gone all the way up to 3030 before selling off again. The market then broke down below the 3000 level again, which of course is an extremely negative sign. With that in mind, I like the idea of fading short-term rallies, because obviously we are starting to run into a significant amount of noise. I think at this point what we are looking at is a market that is ready to give up some of the gains, as 3000 seems to be a major battleground.
S&P 500 Video 28.05.20
Having said that, we need to get above the 3100 level to have comfortable sailing to the upside. I think at this point we are likely to see a lot of noise but I think what you can also expect is the fact that perhaps the US/China trade war picking up could come back into play, and that is something worth paying attention to. With all this being said, it is likely that we will see a lot of noisy trading at this point, as the market is facing a major barrier of noise.
Quite frankly, a lot of traders who have bought this market down near the 2400 level are quite happy to sell it here as we are running into trouble 500 points later. It is not that we cannot break out to the upside, it is just that there was major selling pressure in this general vicinity previously, and market memory dictates that we will be paying attention to it.
Silver markets continue to see a lot of noise in both directions, as we had recently seen a massive move higher. At this point, it looks likely that the market continues to see a lot of back and forth, and I do not see that changing in the short term. Just above the $18 level it is likely that the gap that appeared in February will continue to be at the very least a psychological barrier. Yes, the gap has been filled but a lot of times these gaps continue to have at least somewhat of an effect in the future.
SILVER Video 28.05.20
If we can break above the little gap though, then it is likely that we could go to the $19 level above. At this point, the market is likely to see even more resistance, but raking through the $19 level clearly would open up the door to the $20 handle. On the downside, the $17 level is massive support that if we break down below it is likely that we will go looking towards the 200 day EMA which is closer to the $16.40 level, and then the $16 level after that as it was massive resistance previously.
That should be supportive now, so keep that in mind. All things being equal, this is a scenario where think buyers will come in on dips more than anything else, but I would wait for silver to get a bit “cheaper” in order to take advantage of what has been a very bullish run.
The West Texas Intermediate Crude Oil market has been quiet and choppy during trading on Wednesday, as we await to see whether or not the inventory situation is changing. What is working against the crude oil market more than anything else is the fact that Russia’s already starting to talk about increasing production in June, while the Gulf States are talking about the other side of the equation. At this point, the market looks to be a little bit confused, but the gap above still needs filled and it certainly looks as if the buyers are going to try to make that happen. I believe the $30 level underneath should be somewhat supportive.
Crude Oil Video 28.05.20
Brent markets also look as if they are supported just below, in the form of the 50 day EMA. There is still a gap above here that needs filled as well, and as a result I think it is only a matter of time before the markets tried to push into that gap. The $40 level of course is a significant round number, so course there will be traders look at that as well. Ultimately, if we break above that level then it is time to fill the gap which extends all the way to the $45 level. On the other hand, the market breaks down below the 50 day EMA, then it is likely that we will break down towards the $30 level. At this point though, it looks like the buyers are very tenacious so one would have to think that it favors a bit of a grind to the upside still.
Natural gas markets have gone back and forth during the trading session on Wednesday as we could not break above the $2.00 level, an area that of course is psychologically important. Even if we do break above there, it is likely that the market will probably go towards the $2.09 level, and then eventually try to break out above there. Having said that, I do not think it happens in the short term and quite frankly I believe that the natural gas markets are being buoyed by a couple of different things.
NATGAS Video 28.05.20
The first thing of course is the fact that we are going to get a lot of bankruptcies in the drillers, perhaps as many as 200 companies. Another thing that helps natural gas is the fact that economies are opening up, and people are looking to buy energy in general. I do not think that is enough to send the markets skyrocketing, but clearly, we are trying to form some type of bigger “rounded bottom.” Looking at the downside, the 50 day EMA offer support just as the $1.80 level does due to the fact that it has shown itself to be resilient as of late.
Ultimately, this is a market that I think will continue to go back and forth it makes a nice day trading opportunity for a lot of traders out there who are patient enough to wait until we get to the outer reaches that signify the $0.20 range that the market has been stuck in as of late.
Gold markets rallied a bit during the trading session after initially dropping below the 50 day EMA on Wednesday, showing signs of life again. The $1700 level is a large, round, psychologically significant figure that will attract a certain amount of attention, just as the 50 day EMA would. At this point, the market is likely to continue to see demand for gold, for no other reason than to mitigate potential risks out there when it comes to portfolios. After all, we find ourselves in a very noisy economic scenario, as there are a lot of concerns as to whether or not economies will truly open up, or if it is a scenario where we are just going to get a short-term pop, only to turn right back around.
Gold Price Predictions Video 28.05.20
Beyond that, central banks around the world continue to print money as fast as they can, so that does drive up the “precious metals trade” as a way to protect against financial losses in that environment. The interest rates are still extremely low around the world, but if and when that gives way, this market could shoot straight up in the air. In the meantime, I believe that the 50 day EMA offers enough psychological support that we will probably go looking towards the $1750 level. I believe that there is a resistance barrier that extends to the $1760 level, and once we get above there it is likely that we go looking towards the $1800 level after that. I do think that happens given enough time, and that we then go looking towards the $2000 level.
The US dollar has pulled back a bit during the trading session on Wednesday, but then shot higher towards the ¥108 level. That is an area that causes quite a bit of resistance as you can see, and now it is a question as to whether or not we can continue to go higher? I am looking for some type of short-term signal to start selling again, but only for something like a 40 PIP move. I think that the market is essentially stuck between ¥107 level on the bottom, and the ¥108 level on the top. Because of this, I do believe that the markets are just going to go back and forth until something changes overall.
USD/JPY Video 28.05.20
However, even if we break above the ¥108 level, I find it exceedingly difficult to think that we will simply slice through the 200 day EMA which is at roughly ¥108.30 above. In other words, I think the market is essentially going to continue to see a lot of noise. The ¥107 level underneath being broken to the downside could open up the move down to ¥106, possibly even the ¥105. Overall, this is a market that as you can see is very noisy, and difficult to trade for anything more than a quick scalp. That being said, if you are an intraday trader you may find this extremely attractive sledding, as it makes for an easy ride for those of you who like small time frames.
Brexit negotiations seem to be going nowhere as per usual, and as a result people are beginning to worry about the British pound again. Ultimately, this is a market that I think has gotten a bit expensive anyway, so it is not a huge surprise to see that it might be ready to rollover. I think the words coming out of the British negotiator did not help the situation either, suggesting that the European Union needs to “evolve its position” to reach some type of an agreement. It has been a while since we had to worry about Brexit, but that clearly will come into focus again as people start to shift attention away from the coronavirus situation.
GBP/USD Video 28.05.20
To the downside, the market looks as if it could go towards the lows again, but it might take some time to get there. This choppiness will more than likely continue, but we are clearly in a downtrend overall. Because of this, it makes quite a bit of sense to start selling, at least on the first signs of exhaustion on a shorter-term chart. The US dollar will continue to be attractive due to the fact that it is not the British pound if nothing else. US Treasuries of course stay strong, so that of course drives up a bit of demand for the US dollar as well. With that in mind, I prefer shorting giving an opportunity.
The British pound has gone back and forth during the trading session on Wednesday, as we continue to hang right around the ¥132.50 level. The ¥132 level underneath is a large, round, psychologically significant figure and an area that has been both supportive and resistive as of late. Keep in mind that this pair is extremely sensitive to the risk appetite of markets in general, so it will more than likely follow that overall.
GBP/JPY Video 28.05.20
Furthermore, the British pound is a currency that I do not necessarily trust, because quite frankly there are a lot of economic concerns coming out of Great Britain. There are horrific numbers as far as the pandemic is concerned, and of course the economy is completely shot. Furthermore, there is the sticking point of the Brexit still, so keep in mind that the scenario is not good for the British pound longer-term, and the 50 day EMA sitting just above has been relatively reliable as of late.
I anticipate that the market will continue to be very noisy, but clearly, we are in a downtrend from the longer-term standpoint, so it is simply a matter of waiting to see when it rolls over for us to take advantage of the shorting opportunity. If we can break down below the ¥132 level that will more than likely be the catalyst for further losses. On the other hand, if we break above the ¥133.50 level, extensively the 50 day EMA, then the market is likely to go looking towards the ¥135 level above.
The Euro initially fell during the trading session on Wednesday to reach down towards the 1.0950 level before turning back around. By doing so, the market showed resiliency and it looks as if it is trying to break out for a bigger move. Was worth noting is that we have formed a couple of hammers on the monthly chart, and that suggests that we are going to see an attempt to break out for a longer-term trend change.
The Euro got a bit of a boost during the day due to the €750 billion recovery bill going through the European Commission, showing signs that perhaps the European Union is starting to get things together. That being said, it is also worth noting that the 200 day EMA is starting to cause a bit of a reaction so I think one of two things are about to happen…
EUR/USD Video 28.05.20
We will either break above the 1.11 handle, and continue to go much higher for the longer-term, or we are simply trying to widen the range in general. This is a messy pair to say the least, and one that I absolutely hate trading. This is because there are very few trends other than to grind lower over the course of the last several years, but grinding being the main characteristic. If the market closes below the 1.1080 level, then it is likely that we pull right back into the previous consolidation area. It is going to be one of these two scenarios, and it could take several days to make the decision, as it is typical of this pair which is the realm of high-frequency traders.
The Australian dollar initially tried to rally during the trading session on Wednesday but has given back quite a bit of the gains early during the trading session. By doing so, this is a sign that perhaps we are starting to run out of steam at a very crucial region. The question now is whether or not the market can continue to go higher? We are at an area that I think will tell where we are going longer term, as we are dancing around the 200 day EMA, and of course where we had broken down so significantly over the last couple of months.
AUD/USD Video 28.05.20
At this point, it is a “last stand” of sorts for sellers, because quite frankly the market has been chopping back and forth in trying to grind above this region but has not been able to do so quite yet. However, if we do break above the 0.67 handle, it is likely that the market continues to go much higher. Otherwise, we could see a long and slow move lower. Keep in mind that the Australian dollar is overly sensitive to the Chinese trade situation, and as a result it is likely that the market will be all over the place.
Ultimately, this is an area that I think is worth paying attention to, and therefore it is worth noticing whether or not the momentum can carry it higher. Quite frankly, this has been an extraordinary move, but one would have to think that eventually we run out of momentum. We have not had a significant pullback for the last 1000 pips or so. That is not normal behavior, just as it was not normal on the way down.