Everybody who’s ever been on horseback knows this term. Horses instinctively know when the ride is nearly over and they’re headed back to the barn for some oats and grooming. They get a sudden burst of energy that can catch their riders off guard.
The market undergoes a similar phenomenon most years. Everything from performance figures to bonuses are tied to a successful end of the year run. With November just around the corner, I think traders have picked up the scent.
It remains to be seen whether central bankers and their new ringleader (to be named Thursday) can get to the barn without any major trip-ups.
Gold reached the top of our downside target range on Friday, meaning the dollar’s run might be nearing an end.
We’ll update the dollar, USDJPY and oil/gas in today’s post and see if we can discern which path they’ll take over the next two months.
continued for members…
VIX backed off the yellow channel bottom and has constructed another rising channel from which to break down at a key moment.
While CL presses onward…
…and RB runs out of room.
USDJPY is in need of a backtest, but I remember well the Halloween surprise of a few years back.
And, EURUSD continues to slide.
This leaves SPX with a likely backtest of the SMA5 100 and, if that fails, the SMA10 at 2565.
Otherside, it’s still in breakout mode.
ES has broken down through a little TL from last week…
…but, remains in the rising purple channel.
UPDATE: 12:09 PM
SPX has broken down from the SMA5 100, the smaller rising red channel and is testing the SMA5 200. It has SMA10 support at 2564.83 (ES: 2564.60), Fib and TL support at 2558.92 which, if it drops through, should lead to a test of the red midline — probably around 2552 (depending on timing.) Note that I have left the backtest at 2536.31 as a logical additional downside target.
UPDATE: 3:55 PM
SPX is making a decent recovery with VIX’s help.
Surprisingly, VIX hasn’t broken down…yet.
