OMG, the markets are crashing!!! At least that’s what a lot of people are saying. But I firmly believe you must trade what you see, and not what you (or anyone else!) may think. And so on that note, let’s see what the stock market has in store for us today.
For starters, yes there’s been a lot of negativity lately. The S&P 500 had a couple of down days recently, but the stock market today is up off of a bounce on the daily trendline yesterday, and we’re continuing to make higher highs and higher lows. So even if you’re a beginner in the stock market, a beginner to stocks in general, or a beginner to day trading, you need to acknowledge that we are in a pattern of higher highs, and higher lows. Until that changes… the trend is UP my fine trading friends. That being said we came very close to breaking the higher low and if that were to happen, we’d have to reconsider our bullish bias. But whether you’re day trading or swing trading, and especially if you’re just taking your first stock trading course, you should avoid just going on what you think *could* happen, and go with what *is* happening. And right now what is happening, is the market making higher highs and higher lows! *IF* my analysis proves to be correct, then there is some serious upside yet to come. But I’m perfectly willing to acknowledge that I could be proven wrong. Any surprise bad news could happen and spook the market, especially at these high levels, and things could change quickly so, always be ready to switch and go with the winning team.
Now moving on to the Russell 2000, my primary trading market personally (and one I strongly recommend anyone new to futures trading because of the new micro contracts… check them out!). The Russell 2k has been in a very choppy flag pattern for a while now which is ultimately a bullish price pattern. But, we have to break out to the upside to confirm this. If that happens, I’m seeing the potential for some significant higher prices in this futures market. But we don’t know when this will happen, if at all. If price breaks lower, then there’s a problem in this market and ultimately we’ll be watching to make sure the previous higher low doesn’t get violated. If it does… time for a new plan of attack! For now, be prepared for confirmation to the upside and trade with the market.
Now moving on to crude oil futures. There’s been a pretty ugly correction recently, but if you know what to look for it’s not actually anything too scary. Crude oil pulled back to exactly the 61.8% retracement of the wave 3 which is textbook what we look for when using Fibonacci trading techniques along with Elliott Wave theory. I especially like that we had some nice technical signals in the form of MACD and Oscillator confirmations at this key level, so ultimately I don’t see anything wrong here, and am looking for further upside ahead.
Gold futures are waking up in a big way and jumping to the upside, which is what I’ve been expecting for a while now after the wedge pattern that I believe completed a wave 4 correction. At the moment sellers are coming out to push this market down, but as long as we hold above the triangle pattern of that wave 4, then there should be additional upside coming for gold. So if you like to trade gold futures, gold stocks, gold mining stocks, or anything else that’s tied or leveraged to the price of gold (or even if you’re into gold coins themselves), watch carefully for a move higher.
Natural gas futures trading has always been tricky for me because of the pricing being out to 3 decimal places. But if you’re a natural gas trader, or are exploring a natural gas trading strategy, then this might be important to you. I’ve changed my outlook a bit, due to the depth of the recent pullback. I now believe that the pullback is actually a 61.8% retracement of a full 5 wave Elliott wave cycle. If this holds (and I see other technical indicators that suggest it could), then we may start the next major move up in natural gas. But watch out for the recent higher low because if that gets broken, this analysis is out the window and we need to change our tune!
Not for those who love crypto trading or cryptocurrency investing! I was looking at Bitcoin last night and noticed an amusing pattern. Looks a lot like a camel or maybe a dinosaur! Doesn’t mean anything but I thought it was funny! It does look like Bitcoin has completed a weekly timeframe ABC correction, and is ready to head to the upside. This would mean one last big push to the upside, which if we get it, I suspect will challenge the previous all time highs. It may need a catalyst of some kind to get up there but I doubt it will need much. Crypto is still in a major bull market and Bitcoin is the “rising tide” that raises all ships.
That’s it for today’s analysis, trade well and have a great weekend!