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It’s pretty rare to see a V-shaped recovery stop short of new highs. But, it happened Wednesday and again Thursday. What’s more, last night’s ramp job is rapidly unwinding as we approach the opening bell.
Are traders actually paying attention to the news flow? Or, are the algos just taking their very heavy feet off the gas? Regardless, this represents the last opportunity for the various backtests we’ve been expecting to take place without a serious breach of channel support.
The SMA10 is sitting at 2764.52 today and should be up past Tuesday’s lows (2768.84) by Monday. With the pols fumbling the budget deal and the IEA raining on OPEC’s parade, we might just get a noticeable selloff that allows us to tag most of our targets at the same time.
Keep an eye on VIX, today, as it seems intent on nailing last week’s upside target.
continued for members…
EURUSD is hanging around, ready for a quick pop higher?
While USDJPY is testing the yellow channel midline for the 5th day in a row.
The dollar looks very susceptible to a quick drop.
The 2768.14 A=B=C would be slightly lower than Tuesday’s lows — the only reason I can see to push part of the drop off until Monday. But, we’ll see. At this point, I’m much more interested in the currencies, VIX, CL and RB.
Speaking of which…CL is off 1.3% and RB is off 1.82% on the IEA report — the essence of which is that the rapid rise in prices will generate an “explosive” increase in US and Canadian production. The US is expected to actually surpass Saudi production.
Nice rising wedge on RB…
The eminis (which also failed to make new highs on the V-shaped bounce) are off 9 points from their overnight high — which was a pretty clean backtest of the broken white channel. Of course, it’s been broken before and had no trouble springing back to life, so please use stops.
If, for some reason, the SMA10 is tested and breaks, the next support is at 2744.46, followed by 2728.79.
For those of you following the drama in gold, remember that it’s a bit of a crapshoot from here on. As I wrote the other day, the easy money has been made. But, if DXY drops as I believe it will, GC has a shot at 1348.30 and 1380.
I’m driving my daughter back to college today, so will be out until late this afternoon.
GLTA.