This will be my last post on Culley Charts for the time being. I will be shifting gears and pursing an exciting new direction. You can continue to follow along with me on Twitter and wherever I land. It has been a blast creating and connecting with everyone over the last few months. I am grateful for your support and look forward to the road ahead.
-Ian Culley
Bonds - Cling to Support
Stocks - Go Big
Commodities - Slam on the Breaks
Currencies - Spin a Familiar Dance
Bonds
10yr. T-Note
The 10yr. T-Note could be forming a flag or pennant just below support at the 137^065 level. A close next week below 163^210 could complete the pattern. If we don't see a resolution next week, then the interpretation is questionable and morphing is likely.
30yr. T-Bond
A similar situation is presented in the 30yr. T-Bond. A tight, short-duration pattern is forming just below the breakout level. Again, I expect a resolution sometime next week or this interpretation becomes questionable.
Stocks
Vanguard Mega-Cap 300 ETF - MGC
Last week it was all about the major Mega-Cap names breaking out of bullish consolidations, and of course the Vanguard Mega-Cap 300 ETF closed at ATHs.
S&P 500 Index - SPX
The S&P 500 closed out at ATH's last week. This comes after SMIDS and Micro-Caps have been stealing the show. Believe it or not, SMIDS and Micro-Caps continue to hit new ATHs.
Very few US Stock Indexes did not go out at ATHs this past week. The Dow Jones Industrial Average and Dow Jones Transportation Average were among the most notable.
Global Dow - GDOW
GDOW continues to take a breather after a strong start to the year. There is absolutely nothing bearish about the pause in this uptrend.
S&P 500 and the Value Line Geometric Index
I always like to include the Value Line Geometric Index - VLG. The chart below highlights that divergences between the S&P 500 and the VLG often carry clues to the direction of future price action in the S&P 500. Currently, the VLG is hitting ATHs while confirming the trend in the S&P 500.
It also shows that the median stock has been chopping sideways since the beginning of 2018. Which is more evidence that we are at the beginning of an uptrend, not the end.
S&P 500 and the Homebuilders ETF - XHB
This is another chart that shows that stocks haven't gone very far in the last 3 years. It also displays the important relationship between the Homebuilders ETF and the S&P 500. Similar to VLG, we can look for any bearish divergences in the Homebuilders ETF as a warning sign of possible weakness in the S&P 500.
Commodities
CCI Index
I like to use the CCI Index because it's a more equally weighted version of the CRB Index. The regular CRB Index is more heavily weighted towards energy, and often takes a very similar shape to the Crude Oil market.
Regardless of the index or commodity market in focus, this past week ended on a note of caution. The CCI Index formed a dark-cloud cover candlestick on the weekly chart, signaling a possible short-term reversal. The breakouts and burgeoning uptrend within Commodities remains intact, but it may be a good time to tread lightly.
Of all the commodity markets, it seems that Grains really took it on the nose Friday. I'll briefly cover those markets below.
Corn
Corn broke support at the 520^0 and the 423.6% Fib expansion level on Friday. I do not know if it will retrace all the way down to 456^0, but it definitely looks weak.
Soybeans
Similarly to Corn, Soybeans broke below a Fib level representing support. Unless a clear continuation pattern develops, I am not interested in the long-side of Soybeans until a strong close above 1380^0.
Soybean Meal
Meal ran into resistance at the 423.6% Fib expansion level and fell precipitously. A reasonable area of support lies around 410.0 and the 261.8% level.
Soybean Oil
Bean Oil held up the best last week. I still believe a bullish flag is developing and that the 41.00 level is a strong area of support.
Chicago Wheat
Will the 100% Fibonacci expansion level hold as support in Chicago Wheat? That is the big question and my main area of focus, regarding Chicago Wheat, heading into next week.
Kansas City Wheat
Possible areas of support in KC Wheat lie at 612^0 and 583^2.
Minneapolis Wheat
Minneapolis Wheat put in a very bearish candle Friday. It was obviously a pattern throughout the grain market, but it seems that the 598^0- 600^0 level will most likely be tested.
Currencies
US Dollar Index - DXY
Current price action in the DXY is taking a very similar shape to what we saw last summer.
WisdomTree Emerging Currency Fund - CEW
I'm keeping a close eye on the tight consolidation pattern in CEW. A break in either direction, up or down, could provide valuable information regarding the DXY. My bias still remains to the upside, but I can't rule out other possible outcomes.
Aussie Dollar Index
The AUD is extremely important to the intermarket picture given its association with commodities and risk assets in general. It's been chopping sideways for the past couple weeks against the USD and DXY constituents. This type of price behavior is normal after strong moves, however we want to keep a close eye on the AUD for any signs of broad weakness.
Aussie Dollar vs. BRICS Currencies
Just like the USD, I like to view the AUD against leading emerging market currencies. Again, in similar fashion to the DXY and CEW relationship, I'm looking for any meaningful divergences between the two indexes.
NZD/USD Cross
The NZD/USD cross has developed a flag, of the half-mast varietal, with bullish implications. A breakout from the flag could kickstart the next leg higher towards the target of the H&S Bottom.
AUD/NZD Cross
I continue to monitor the AUD/NZD cross for a trading opportunity. I like the fact that the upper boundary has been tested far more times than the lower boundary, and that the 6+ year Coil can be viewed as a bottoming pattern. I think the AUD/NZD cross could provide plenty of upside potential in the months ahead and beyond.
You might wonder how I could be simultaneously bullish and bearish the New Zealand Dollar. I do my best to approach each individual market/chart based on its own merits. It's that simple. Louis Sykes recently wrote a great piece on the subject that you can check out here.
The daily chart exhibits a horizontal boundary that has been tested numerous times over the last couple of years. A strong close above 1.08400 could afford a measured risk entry.
Crypto
* All data is current as of Friday's close.
Bitcoin
The 30,000 - 31,700 level held last week on a closing basis. If it continues to breakdown next week, then the next area of support should come in around the 23,000 level.
Ethereum
Ethereum ran into overhead supply at around the same level as those 2018 highs. It appears more consolidation is needed while demand continues to digest supply. Support should come in around 881.50. Once demand can overcome supply the next target lies at the 161.8% Fib extension level around 2,150.00.
Litecoin
Litecoin is consolidating around its former 2019 highs. This level represents the completion of the 3 + year Symmetrical Triangle. Though Litecoin is struggling to complete the pattern, its interpretation or validity has not been violated.
RIOT
As expected, the 17.75 level held as support last week. If it continues to hold, then we could see continued consolidation between the 423.6% and 685.4% Fib levels.
Thank you again for your support! You can continue to contact me at ianculley@culleycharts.com. If you have any questions or comments, please feel free to reach out.
DISCLAIMER: All information and opinions expressed by Culley Charts are strictly that, and should not be construed as investment advice. Market participation comes with inherent risk, and the responsibility of managing this risk lies solely with each individual investor.
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