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Mercury

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Mercury last won the day on January 12

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  1. Weekend price action on Bitcoin is suggestive of a wave 1 turn that may produce a wave 2 retest of the H&S neckline or channel line. Thoughts of a test of the key resistance level of 10,000 ,may be suspended until this retest occurs and produces a strong rally.
  2. On Tuesday 7 January 2020 Gold commitment of traders made an all time high Long position (or at least as far back as 2007, which is kinda the same thing). The net position wasn't an all time high but was close, the ATH was on 3 Sept 2019. Remember what happened next? Why is this relevant? When it comes to markets like Gold and Silver the commercials hold all the cards. They know the market dynamics better than anyone and certainly better than Wall St. I trade with the Commercials on Gold/Silver and the COT data is screaming over bought as the non commercials appear to be all-in Long. When a market is imbalanced like this, one of two things happen: we get a massive moves in the direction of travel as everyone tries to pile in but there are no sellers so the price gaps up and up until sellers return (unlikely on Gold at this point IMO) OR we get a sharp reversal as buying evaporates. If we think about fundamentals we may consider the following: Geopolitical tensions have eased a bit (although nothing is resolved) There is a trade deal between the US and China (hurrah!) although it is a largely face saving "phase 1" deal of little real consequence. Let's see what happens in phase 2..! Brexit is now resolved, it is happening (but exactly how and when is not clear) The stock market is on a rocket to the moon and the Fed is pumping in $50 bil in overnight Repo operations every night into the banks (what could possible go wrong???) The USD is rallying again The ISM non manufacturing data is still making positive noise (well it's all about services and the internet these days right? Who needs nasty manufacturing and actual goods???) If I consider the direction of travel (rate of change) of key economic indicators for the US (and for a moment suspend my belief that many of the measures are defunct, like GDP) I am not at all confident in the US economy and expect we will see a recession declared (post hoc) as having started in 2020 but we are not there yet. If I consider the emerging zeitgeist on Gold (it will beat previous highs; it will get to 5,000; it will get to 10,000) the hype is matched only by that seen in Bitcoin and stocks. When MSM start talking up a market you can be almost sure it will do exactly the opposite... If I consider classic charting techniques, a head and shoulders neckline breakout, such as we have seen on Gold, is typically followed by retest of said neckline, this would suggest a retest of the 1,350 area. So the scene is set for Gold and Silver to put in a significant reversal. in defiance of the chatter. The techncials on Gold look as follows: After a massive rally to 2011 tops price has dropped in a complex A-B-C retrace to the Fib 50% (78% on Silver) then put in a Head & Shoulders trend reversal spanning just short of six years before breaking out to the upside and leaving behind a classic U shaped base from which a long term rally would be the expected result. The rally has stalled of late at the Fib 62% resistance area, which brings up an alternative scenario (and A-B-C - Red labels on monthly chart). However the more conventional scenario is for a retest of the H&S neckline in a 1-2 EWT form bearish phase, with monthly oscillators all over bought. Zooming in to the weekly chart we can see that the rally up from pink 2, the right shoulder of the H&S and a failed retest on the long term supporting trend line, is in a 1-5 form and turned on NMD with a significant pin bar price action, the second such event of late. An A-B-C bearish retrace is now indicated with a target of at least the 1,350 level where the neckline (weekly chart) an ice line converge. An alternative neckline drawn on the monthly chart targets more like the 1,300 level and depending on when this happens this could eventually produce a retest of that long term supporting trend line but that is a ways off yet. Shorter term the daily chart shows a small 1-2 (brown) after a major bearish reversal off the over head resistance that may yet have another leg up in it before a bearish wave 3. to a larger wave A. Looking at Silver I think we have yet to see any major breakout rally as price is contained within a long term Triangle off a double bottom. Unlike Gold, Silver did not put in a higher high so the price action looks to be entering a wave 3 down, which will likely travel much lower, relative to Gold, and probably put in a large flag consolidation at some point. A retest of the bottom of the consolidation Triangle and lower long term supporting trend line would not surprise me. So net my lead scenario is for a bearish phase now for Gold/Silver, which may require a small further rally to prime the pump but when it hits will be a hard run down in an A-B-C form to retest key support levels before the much talked about and desired massive rally, which would only occur when geopolitical and economic tensions reemerge, fear creeps into the markets generally, perhaps also with a USD bearish phase and stocks also and ideally rising inflation as well. Right now the case for the long term bull market in Gold/Silver just doesn't seem strong enough, although it should be...
  3. Sure, why not... My posts are not about NOT being long, they are about keeping an eye on the potential end. Traders are only bearish or bullish in the moment if they are swing traders, it is the perma-bears and perma-bulls you want to watch out for, their bias has then by the short and curlies... For sure I am long term bearish but not yet short term as it obviously hasn't turned yet but I prefer to be Long other markets in general rather than having to sweat a big reversal on stocks, that only works for day traders, which I am not. This way I get a good nights sleep not sweating over an overnight Asia crash and don't have to sit glued to the screens all day...
  4. Mercury

    Apple

    Possible top out and A-B-C retrace to a failed test of the breakout zone? A break back into the channel (blue line) is still the key with a lower low and test of the lower channel line around 29,000 being required for any possibility of a sustained drop (correction or otherwise). 31,000 is the first target then 30,480 is important too.
  5. A bear can dream... That maybe one day (maybe today) the markets will realise that all the QE4 repo operations in the world wont paper over the cracks and the cracks are likely to be structural...
  6. Great piece on RealVision today with an economist called David Rosenberg, who has recently started up his own firm (aged 59). One thing he states, which is a belief I hold, is that economists who wok for large firms cannot go out on a limb as this is a career threat so they hug the consensus. In other words the consensus is self-fulfilling and therefore will also hug the trend and never spot the major turns. For that you need something else...
  7. Watch out Bitcoiners! Quite a bit of resistance at 9000 at present with a possible 1-5 up completed and NMD on the 1H chart. We could see a bit of retrace price action down here with 8500 and 8300 in focus for a turn back up for another, stronger, assault on 9000. The Daily still looks LT bullish but a break of 9000 with a daily close above is needed for a follow on.
  8. The spike up and reversal (on retail data release) hit the Fib 50% off the wave B (brown). If this is sustained then I would expect a test of the 12950 and the 12900 in fairly short order. Watch out for a short term bullish retrace, which would offer a route for a Short. This is currently consistent with EURUSD but I think GBP will fall further as the EURGBP pair is signalling a rally for a while at least.
  9. Agree, that is the obvious target for any bearish turn now, although a run up past that and fall back that coincides with stock over exuberance can't be ruled out.
  10. Russell 2000 has hit an interesting point with US large caps just into fresh ATHs. Price has hit and rebounded back off the top of a daily narrowing channel just after the Fib 88% off the ATH. There is NMD on Daily and 1H charts and a credible 1-5 EWT labeling for the rally, that would be a wave C of wave C. Not conclusive until we see a small 1-5 down, A-B-C retrace and then a fast drop but an initial sequence may be in play on the 1H. One to watch.
  11. That's how it starts, especially for a retrace as opposed to a motive move. After a sharp jump with a gap and then close of the gap with a strong bearish move (1-5) there was a good chance of a relief rally. Price bounced off the Fib 50% on positive momentum divergence after a credible EWT 1-5 so the chances were high of a relief rally. 2 ways to trade it: Preemptive early Long after a small 1-2 with a stop just below the previous low for a very low exposure trade and excellent risk reward, which is what I did because wave Bs are tricky so the earlier you are in the better as whipsaw can easily stop you out Wait for a break of short term resistance, but as I mentioned this leads to greater exposure and leaves you at the mercy of that unpredictable wave B. There is a third way, which is to wait for the wave B to end and get short. Soon I will move my stop to BE and sit and wait for the move to play out one way of the other.
  12. One thing you can be sure of is that beginning of year forecasts for where the year will end or what will happen during the year will not be accurate... Still if we take it as an indicator of the near term then that would support my thesis for the next quarter at least...
  13. I can't remember a time when Oil remained in such a tight range... I suggest the Journo who wrote this may not actually know much about markets in general, never mind Oil... I remain with my LT target around the $85 level on Brent. Form a purely technical perspective the price action is consistent with a complex retrace such that we should expect a move back toward the $60 level before a strong rally. Short term price is getting held at the Fib 50% level just now and after such a sharp drop we might anticipate a relief rally to maybe about $68-69 before a resumption of the bear move to $60. There is strong PMD on the 1H chart at the lower point in the drop. But it's oil so anything can happen, as we saw with the drone strike...
  14. Aligned to the EURUSD post I see a potential bearish move on GBP, which should retest the prior breakout zone at a minimum and may well retest the previously broken trend line. Similar to EURUSD the price action is more in keeping with an A-B-C (complex version) retrace rather than a strong rally at present so we may have to wait for this to complete before any potential major rally. At best, given the uncertainly, I am cautiously MT bearish but remain LT bullish.
  15. I have not been comfortable with the price action on EURUSD, well all USD pairs and DX itself, in terms of the case for a USD bear market. It started well but has recently broken down and now looks like a contender for another leg up (on DX, down on EURUSD). Long term I still see EURUSD rallying but short to medium term I see some bearishness with 2 scenarios: A bearish retrace in A-B-C form to retest the first weekly channel line (grey) that was broken back in early Dec 2019. Another leg down on this slow grinding bear phase to close a gap left from the previous breakout and rally (back in April 2017). Short term the market ha just posted a hit and rebound back down off the Fib 50%. The wave B (brown) could manifest a bit higher yet and a breakout of the upper weekly line no.2 and the next horizontal resistance (higher high than 31 Dec 2019) would negate these scenarios and throw the long term rally back into sharp relief. Net I am tactically Short and waiting to see how price action develops. I see this playing out across many USD pairs.
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