After a big selloff at the end of the day Friday, I was very interested to see what the S&P 500 was going to do when it opened on Sunday. With the events unfolding in Iran, it wouldn’t have surprised me to see the markets sell off further. But the key thing to notice is that the ES did not break the previous higher low. Also, the overseas price action is up so it seems that the dominant view is that we are not heading sharply lower, at least not yet. So, for now, the uptrend is still intact and the expected direction is still with the bulls. Watch out for the low of Friday though, if that gets broken then we might be seeing the start of a larger trend reversal shaping up.
The Russell 2000 (my personal favorite market) is also heading to the upside, after bouncing off the bottom of the parallel channel it’s been stuck in for a while. All my technical analysis suggests that the price wants to head higher so that’s the direction I’m looking to trade at the moment. Anything can change once the markets open though so be prepared and just trade what you see after that first hour or so works itself out.
Crude oil futures are popping higher this morning after hitting that 61.8% Fibonacci retracement in what I believe to be an Elliott wave 4. If we can hold above that level then I expect to see higher prices from here. If that recently low is broken to the downside, however, I think there could be a little more downside to come in oil. Or course all the middle-east tensions should theoretically be bullish for the price of oil, but things aren’t always as they appear so we have to just go with the charts and not concern ourselves with what could or might happen, etc. I think a lot of the current conflict may have already been priced in since this isn’t entirely unsurprising and things have been a little rough over there for a while.
Gold futures keep being sold down every time price pops its head up, but the downwards moves don’t have a lot of momentum behind them and gold is still hanging onto its recent gains. For the moment it’s unclear if we’re in an Elliott wave 5 and are almost done, or if it’s got room to head higher. I do see some indications that gold could have room to go to the upside, but so far it hasn’t been able to get there. If it chops around for too much longer then we might have a “short” wave that ends near these levels before giving us the larger correction, and another potential buying opportunity. So if you’re into gold trading, beware of chasing price at these levels. You might want to just wait for that pullback to enter at a more clear level.
For natural gas futures, it looks like price is trying to head higher, but on the shorter term 60-minute chart, that picture is a little less clear. Watch that recent low and if it gets broken to the downside, then my analysis suggests there could be some more downside ahead. But the larger trend, to me, looks like it’s wanting to head higher from here so if I had to pick sides in natural gas, I’d have to go with the bulls.
Bitcoin technical analysis is sometimes a little tricky because of how volatile it can be, but if you just stick to the basic concepts of Dow Theory, Elliott Wave, and Fibonacci, you can have a pretty decent picture of where the market may be heading, and what price levels to watch out for. Right now BTC has had a hard time heading higher, there’s significant resistance overhead and we can’t know how much longer it’s going to last. The bigger picture technicals are all still pointing higher, price is above the 50 SMA, all other technical indicators are pointing to the upside so overall I’m still expecting to see higher prices in the King of Cryptos.
That’s it for the morning, now let’s see what the trading day brings us. Keep it green everybody!