Coffee Futures fall today below 100, to 97.25, not seen since 2006. Producers, according to the CFTC COT reports, are net long some 80,000 contracts, an all-time high. These extremes in positioning are accurate contrarian signals, presenting a opportunity to bet on a rebound in future coffee prices over the next 6 month.
Today’s session saw the Nikkei close above 23,000 for the first time since the January sell-off. The chart below shows the Nikkei well positioned for a rally. Note: a) 3 higher lows b) the index on the right side of a long-term uptrend, and c) the first close higher above a 7 month resistance (the break).
This specific setup offers a good risk-reward: Entry now...
Last week I was cautiously optimistic that the EuroStoxx would move higher to 3500, and possibly break from there to complete the mini (inverted) head and shoulders that can be identified since the 30th October 2017. However this week's action adds to a more bearish, alternative path.
The blue support zone is a loosely defined price range of significance; this...
Morgan Stanley, Bank Of America, Citigroup and JPMorgan - all exhibiting similar year to date behaviour. The whole sector is rolling over, reversing the 2017 rallies as the yield curve remains flat, and possibly set to invert. JPMorgan and Bank Of American look particularly bad.. notice both are just managing to hold up above a clear 6 month support. I would bet...
The EURUSD steady decline is likely to be halted at the next major support of 1.16. 1.16 is a clear supply zone, and marks the border between 2015-2017 regime, and todays. Buy limit 1.16 with a target of 1.20. 1.20 will also marks a 50% retracement.
This is ugly. AUDUSD is for a fourth time, bearing down on its trending channel, a key trend established back in 2015 when Commodities bottomed out. This isn't a good sign for a (supposedly) reflating global economy..
Four keys pieces of information to consider:
The COT reports show that Commercials have never been this short, using current prices to lock-in these levels and hedge out future production. This extreme is a signal that prices are nearing peak short-term.
Simultaneously Saudi Arabia has stated that they are actively targeting $80 a barrel. If Shale switches...
Here is a fun (and ambitious) call for all three trade elements - price, direction, AND timing of the DAX - here goes!
1. 11900 is the recent support, and now the floor for a head & shoulders pattern clearly forming
2. 12900 is the key resistance level; that is the high of the 'left shoulder', and the floor when prices were trading at the 'head'. If a 'right...
It would appear so. The NASDAQ has a clearly repeatable path that could be traded for profit. The graph shows the NASDAQ since 2014, with a trend channel plotted to show just how steady and contained the trend has been. The dotted line is halfway in the channel, and therefore represents the trend average.
Prices above this line have a greater chance of...
The range between 87.50 and 88.50 has been a significant zone for prices to trade at over the last 18 months. It was the high in the first half of 2017, and then the floor throughout the rest of the year, into 2018.
Since September 2017, EURGBP has been falling back into this zone, forming a 5 month bearish pennant. This is marked in orange.
Support held prices above 12,000. Resistance likely to be found at 12,750 which marks the floor pre February sell-off, and the high last April i.e. a key trading level. The 12,750 would also be the 50 Day MA if met within the next two weeks. With the level then back in-line with the 50 Day MA, it would no longer be oversold.
Bitcoin's rally and subsequent rout is turning out to be a textbook example of a bubble. Witness the effect of group human psychology and behavioural biases, captured beautifully in Bitcoin's trading history.
The falling Dollar in 2017 helped push Gold prices back up to the $1200-1300 Oz. For the second time in 2 years the market is entertaining higher prices, and with momentum firmly upward. I would not be surprised to see a significant break above these levels.
Consumer Staples are breaking out of their highs, whilst the overall index driven by tech stocks is rallying on extreme momentum. Whilst the spread could widen further, the return to risk seems in favour of rotating into Consumer Staples, 30% behind in just 2 years. In 2007 to 2009 financial crisis, Consumer Staples fell only 30% against the broad market that...
I’m revising a sell target on cable up from 1.40 to 1.45. The strength of this rally is not to be ignored, and the change of tone by the US to welcome a weaker Dollar, can keep the momentum going.
1.40 was the key pre-referendum low, but now with trend surpassing 1.40 with continued strength, let’s consider GBPUSD on a longer time frame. The chart back to 2007...
EEM has today:
a) dropped -1.8% on the day to complete a bearish Head and Shoulders pattern
b) the relative strength has been declining since October
c) the RSI is now below 50
d) the 2 days (6th and 7th Dec) that traded below 45.5 were early signs of a reversal, taking out the higher lows that were the hallmarks of 2017
Short-term target $44.