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Interesting times, Dow and S&P fast approaching all time highs but also entering into triple top territory.

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The crowd are all sitting on shorts so the contrarian is obviously looking hard at going long.

A US/China deal could be immanent (as it has been for the last 6 months, meh) and then there is the inverted yield curve *bites nails*.

But here's an interesting chart, ISABELNET @ISABELNET_SA  "Historically, a recession begins when the real Fed Funds rate exceeds GDP growth. We are far from that right now. So, this cycle should not end any time soon."

This would make sense as high US GDP and low CPI is not recession territory, the opposite in fact.

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As ever when looking for a longer term trade price approaching boundaries is not the time to jump in, the time to jump in is when price is leaving the boundary, whichever direction that might be.

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Minimal movement over the weekend, just sitting watching those highs. Not much on the calendar til Wednesday when there is the ECB rate decision and mon pol statement and in the evening the Fed minutes from the last meeting.

Daily charts;

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Dax and Ftse putting in bullish engulfing bars on the European open 1 hour chart.

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On the US open Dow tests 26241 (red) for support which was resistance back in  early Fed as well as the beginning of this month. Ftse and Dax keeping in touch with recent highs, they just needs Dow to kick up.

H4 charts; 

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Not much on the calendar again today, markets still in wait mode. Time again for the 'this is the top' chart for all those who have been waiting so patiently for over 3 years for a bear market.

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Dow in a bit of a flash crash and drops 150 points after dropping through 26241, may find support here at 26100.

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Trump again times trade war threats just as the markets close in on the highs, this time taking aim at the EU who were very quick to threaten stiff retaliation on any US action. 

Dow looking to build on the base at 26100.

UK GDP and manu prod at 9:30, EU rate decision and mon pol statement at 12:45 with presser at 1:30 and last fed mtg minutes at 7:00 pm.

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Dow not able to break up through the daily pivot this morning is holding Dax back.

H1 charts;

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Dow looks keen to retest 26100 on the US market open but Dax and Ftse not showing much interest in following

H1 charts;

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Dow still lingering about the recent low 26100 and Dax back in tracking mode. So looking for either a retest of 26100 or a break of the daily pivot 26161 and a push higher with Dax to follow.

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Got a feeling you are right.

Perfect play for short squeeze to move market higher.

May have slight pullback first then breakout. Nice commentary casey.

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Thank you @Bell, I try to keep it real and not worry to much about bias, if I see price charging up a chart I'll expect it to continue til it stops, I'm sure the chart will tell me when.

Though I don't trade large time frame charts the rationale should be the same. If price is going up look for an opportunity to get long, try to stay in for as long as possible, expect continuation even when it approaches a boundary, but cross your fingers, tighten your stop and be ready to bail just in case.

I do know some traders who make a living picking tops and bottoms but none of them has less than 10 years experience. The worst thing to do is to allow yourself to be bias lead, you can always find something on a chart to add weight to a hunch no matter how preposterous it might be, which is why I tend to keep away from the media pundits, they can't go on tv and just say "I don't know".

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The H4 charts starting to look a little raggity but hanging on to the bull flags. The Dow hourly is on a up leg so looking for R1 at 26241, looking downward some support likely at the daily pivot around 26150 otherwise it's back down to 26061.

On the calendar the Cny trade bal (anytime today ) could cause a stir, EU Indy Prod could cause an upset at 10 am as could US consumer sentiment at 3 pm.

 

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After a 30 min battle at 26188 Dow storms up to 26241 in a single 5 min bar. Important level this, mentioned many times before in above posts, if price can break this level R2 at 26317 is the next target.

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R2 caught and holding, would expect to rest awhile here to reload the order book and see what the US market open has in store. R3 is at 26400. 

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OPEX this coming week - ATH coming  

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Posted (edited)

Interesting shortened week ahead, the weekly Dow matches the S&P and once again staring at the all time highs.

On the H4s China taking a dive while the other 3 are up against recent highs. At the European open Dax H1 is currently on a search for support leg down and waiting for the London open.

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Edited by Caseynotes

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Dax and Dow out of step this morning, Dow taking a close look at the daily resistance level while Dax hovers over support.

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Markets were reluctant to push forward yesterday so lets see how today unfolds. The three are still running along resistance though this time the Shanghai is on an upswing, wonder if that will make a difference. Dax is chaffing to go higher but watch out for the Ger econ sentiment data release at 10 am.

Dow looks ready to take on the weekly chart resistance level at 26496 (red) again today having failed at the attempt yesterday while the S&P has it's eyes fixed on that all time high (purple).

Good read in John Kicklighter's blog today, draws attention to the China GDP data release 3 am tomorrow plus some market insight in light of Brexit developments.

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Not much movement in the indices, little on the calendar and public holidays coming up, with all time highs just over head for Dow and S&P there will need to be something to tilt the balance. China put in a good GDP figure so the theme of global slowdown has lost some impetus but not sure that will be enough to cause any eye opening movement before the Easter break.

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Philadelphia semiconductor index takes off, sign for the Nasdaq ahead?

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US indices still hanging around the highs with nowhere else to go. Dax has the Ger PMIs to look forward to at 8:30 am and EU combined at 9:00. US retail sales at 1:30 pm. US Flash PMIs at 2:45 pm could be interesting.

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Dax and Ftse have dropped under the daily pivot and currently revisiting support on the M15 charts, wait and see if these levels hold, may see some unwinding of positions today before the Easter break.

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AND 777 IS THE NUMBER OF ...  companies reporting earnings this coming week and some very big tech names amongst them. This is significant as the US indices are waiting at the boundary for either a push forward or a pull down and big tech have been the main drivers for some time now.

Bear in mind also the US market opens tomorrow and that the following week also has a large number corporate earnings releases. See the calendar below.

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Looking at the weekly charts and the 4 month bull run from Dec 23rd continues for the major indices. As mentioned in the last post US indices are approaching the boundary high and will be looking for a push which may come from the big tech earnings data. This week should indicate which way for the major US tech companies with ebay, amazon, facebook, intel and microsoft plus many others all due to report this week.

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For the longer view see one and two posts above, for today's morning session Dow and Dax on a leg up with Dow just checking at PP and targeting R1 around 26620. Dax first target is 12277 while Ftse needs to clear resistance at 7495 before progression.

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Dow unable to break the pivot but not really pushing lower either, Dax pushed further down to test S2 where it's currently stalled.

Into the afternoon and US open and long term still bullish so looking for support confirmation and on to seek resistance.

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    • Going back to my FTSE analysis I see things as follows: 2 scenarios present themselves, other than fresh ATHs that is: 1) the move down to the turn on Thursday was a wave 1 (blue) off a larger scale wave 2 (purple) that should retrace, maybe in a complex fashion with a lot of whip saw price action maybe not, let's see; 2) the recent rally and drop to a new low was a 1-2 (red), which indicates a much stronger leg down is immanent. The #2 scenario would only be valid if price holds below the previous high (circa 7300).  I favour the #1 scenario. There was PMD on the 4H chart at wave 1 (blue), which suggests this is a turning point.  Also the 4H chart shows a 1-5 wave down to the 1 blue, which would be motive and suggests a trend change to the bearish side. There was strong NMD at wave 2 (Purple) which is consistent with a large scale retrace move. Just as with the US large caps, after the stop and turn up there was a sharp retrace drop to the Fib 76/78% zone before the current rally.  As the FTSE was in out of hours at the end of the week this market has not rallied as hard as the US markets.  Also we may yet see fresh ATHs on US large caps while the FTSE100 only puts in a counter trend rally. If we do see fresh ATHs on US large caps and only a retrace on FTSE and probably Dax and Nikkei as well then comparing these markets will be instructive for calling that top on US large caps.  We may, alternatively, see only a retrace on US large caps too if the top of the market in already in. Conclusion: we can anticipate a bullish period on all major indices BUT should guard against a quick reversal on FTSE 100 that would set up scenario #2.  Either way this market looks to have topped out so the coming months though to the Autumn will be critical to deciding things on all indices, and likely quite a few other markets. I am Long the FTSE 100, coincident with my Dow Longs and will swing this up for now but my bearish bias for the long term will keep we watchful for a break down of this rally and I will not be pyramiding this one, far too risky until things are resolved.
    • "....more broadly we have seen currency wars but these have not really captured the imagination of the MSM yet" Actually I'd argue we have had currency wars for some years already. History shows it goes in the following order: Currency war, Trade war, War. (Regrettably).  If I recall correctly the market falls of early 2015 (about 20% down) were blamed on Yuan being devalued by Chinese manipulation. Way before Trump! "....we suddenly get a super massive set of central bank policies that drop rates to zero" Again I'd say that has been going on for some years. Arguably you could say about 35 years since the Plaza Accord. Once fiat became unaccountable (no gold standard) the politicians proceeded to spend, spend spend =debt,debt,debt. Expect MMT  (US Democrats pushing modern monetary theory) to allow them to continue in that vein. Again history says these currencies will all eventually disappear, like species, approx 95% no longer exist.  Broadly I agree with what you say. The present financial system is critically sick that's for sure. It has propped up assets with huge doses of QE and zero rate interest policy (expect more of that when the ECB meets next month). You are correct about the size of stock markets. If the global market was a horse the bond market would be three legs of it! I digress.... However, if you are faced with massive debts then here are your options: 1) Default - Argentinian/Zimbabwe style. Not likely, at least until all other options tried - as that's the end game. 2) Grow the economy at a fast enough rate to meet and exceed future repayment obligations. In a global low anaemic growth environment? Unlikely. 3) Inflate like mad. It's the only viable option. You could, reasonably say, that after 3 massive QE sessions and ZIRP and now  NIRP that deflation is winning. Arguably it's all been a waste of time / money. Where's the kitchen sink? Presumably more of the same and then some helicopter money? It seems to me that this is more in line with Japan (targeted 10yr bond rate = 0%) which someone said in the 90s was  "...the dress rehearsal. The rest of the world will be the main event". Trying to get inflation without destroying the USD global reserve status is unlikely in my opinion and you can't help but feel that some sort of Bretton Woods global RESET will eventually emerge. It's certainly what Russia, China, Syria, Iran, Turkey etc are angling for.....and their central banks have been big buyers of bullion recently. That's why I'd recommend holding gold. Not as a trading strategy (which is what I appreciate this forum is). Nice sharing these thoughts with you>
    • So it looks like my crazy set of channels on the Daily chart is still holding well.  The breakout of the last channel line, which coincides with a nice zone of lateral S/R was retested but failed as I noted in my previous post.  I got Short off an initial rejection from this zone and Resistance line with a tight stop but price never came back so nicely in on a couple of Short positions and stop protected at BE.  Price moved back through the monthly lower channel line (purple) and put in a quick daily candle failed retest and dropped away.  It is possible we could see another retest of this resistance zone before any further move but a break below the 5760 level would be indicative that the Bear has resumed and obviously a break of the previous low around the $56 mark would once again bring $50 into focus.  
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