Jump to content

The US markets may have just signalled the top.


Recommended Posts

A wild swing in the US indices overnight may be the tipping point for the bulls.

From the outstanding ADP employment numbers early in the session lifting the DOW from yesterdays close a massive 282 points to the intraday high and followed by commentary from the Fed wanting to start unwinding the $4.5 trillion balance sheet, within hours the indice had finished 41 points in the red. The S&P500 followed the same pattern.

This type of violent swing can be the longer term defining point for the bulls, as all long positions taken during the session get closed out or sit as unrealised losses on the trading journal. The coming price action will determine if those unrealised positions have to be closed out.
On the overnight price action some very powerful charting signals can be catalogued into the traders set up journal for future reference.

 

Taking a look at the daily and using a confirmation only observation, the large range on the first of March posted a high at 21,171 points the following price action has not breached this level. The longer this persists the more probability of price weakness. I have marked the 50% midpoint of the large range, it is a charting / price phenomena that these large range periods can offer resistance or support at the midpoint. This is a practically strong observation in the weekly chart. (There was an excellent book written on the subject called “The Japanese chart of charts”)

Wall street daily  (-).png

 

 

 

In the intraday session of the market using a 1 hour chart a very nice reversal signal setup has marked the high for now.

The exhaustion high followed by the larger range hourly bar suggest the buyers have left. The inside range and second short range also confirm the absence of buyers, and finally the breakpoint as long positions are closed and the short sellers see opportunity.

 

Wall Street 1 hour (-).png

 

So where too? Referencing back to the daily chart the last spike low set on the 3rd of April has a low of 20,570.

The importance of this level is based around the fact that during the session the market found buyers at the low a price breakdown below this level would simply put further pressure on the long positions, intraday momentum should be monitored for both support and outright rejection at this level.

** Trading always incorporates stops, this setup is no different.**

 

 

Link to comment
  • 1 month later...

Hi 

 

I see you have posted images of cash charts of the DJI provided by IT Finance/ProRealTime. Would you kindly let me know if what I am seeing is the premium version provided by ProRealTime when one opens an account with them linked to an IG CFD account?

 

Thanks

Link to comment
  • 1 month later...

Hi   The Dow and US crude could be worth keeping an eye on. Yesterday's fall from the high for Dow is a nice pull back and linked to the continued downturn in Oil which had a strong push down yesterday to test long term support (since Oct 2016). This was done on only moderate volume and so looks to have been caused more by vacuum than strong bearish pressure. Are the oil bulls just laying in wait?

 

Both could be due a strong bounce up or strong break lower. The US open should be interesting.

 

http://www.barrons.com/articles/look-out-below-dow-drops-60-points-as-oil-tumbles-bonds-gain-1497992484

 

Wall Street_20170621_10.34.pngOil - US Crude_20170621_10.33.png

 

 

 

 

Link to comment
  • 7 months later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
×
×
  • Create New...