Bonds: When Will They Roll
Stocks: Everyone is Getting Involved
Commodities: Copper and Crude Carry the Torch
Currencies: USD Weakness Solidifies
Bonds
Interest Rates and Bonds stubbornly hang on to their respective price ranges, while the rest of the market has spoken loud and clear, "Let's GO!" It will be interesting to see if US Treasuries can hold above support next week.
10yr. T-Note
Will the 10yr. T-Note form a more pronounced right shoulder or has it already formed? A solid close below 137^05 would arguably complete the topping pattern with an initial target around 134^00.
30yr. T-Bond
My initial breakout level in the 30yr. T-Bond was 171^00, but due to price action in early November that level has moved down to 170^00. I believe a break below 170^00 will be accompanied by a swift follow through, but I prefer the lower boundary of the 10yr. T-Note from a tactical perspective.
TLT
If you don't have access to futures, or prefer to trade stocks, TLT is a great way to trade US Treasury Bonds. A break and close below 153.85 would present a sell signal with an initial target around 135.00.
Stocks
Equities, both domestically and globally, have made major moves to the upside in the last month (I highlighted this trend in the Top 10 Monthly Candles Post). This week it seems almost every conceivable US stock index went out at new, all-time weekly closing highs. Of course I wanted to include a few that didn't, while emphasizing current market strength.
NYSE Advance-Decline Line
There are more stocks out there going up than there are going down. Sometimes its just that simple.
Value Line Geometric Index
VLG broke and closed above the area of resistance highlighted last week. The continued strengthening of the median stock is very constructive for equities as a whole.
SPY-MDY-SLY
All three hit new all-time weekly closing highs this past week.
Russell 1000 Value ETF
Last week I included a chart of the Financial Sector, XLF. This week I wanted to look at the Russell 1000 Value Index, because the two charts look very similar (IWD has a 19% weighting in financials), and both are back above their respective, key resistance zones depicted in grey.
It's hard not to like stocks when value is playing catch-up.
Commodities
A rotation out of precious metals and into energy and base metals is extremely bullish for commodities as a whole. Below are some charts that depict this rotation, as well as a few of the many bases that exist in commodities.
Equally-Weighted CRB Index
The traditionally weighted CRB Index (with over 50% weighted towards energy and industrial metals) has already broken above an area of key resistance. Once the equally-weighted index follows suit, things could really heat up in the commodities markets.
WTI Crude Oil
One way to interpret the WTI Crude Oil chart is that a top was formed, completed, and the target was met. Now Crude prices have recovered above the breakout level of the prior top and look to move higher.
This chart looks very similar to some emerging market stock indexes.
Copper
The follow through in Copper speaks to market participants' conviction in the global growth narrative.
Gold
Gold dug in last week and found support at the 161.8% Fib expansion level. The manner in which it found support was quite impressive.
Notice how momentum bounced off the same levels as it did earlier in March. A close above 1,850.00 would be constructive for Gold.
Platinum
Platinum broke out last week in a major way. I will monitor this market for a continuation pattern.
Soybean Oil
I view Soybean Oil as the leader in the grain markets, and commented on the current state of grain markets in a report this past week. It's the only market out of the Soybean Complex that closed above its 2016 highs this past week. This market continues to be my first choice in trading grains.
Last week I mentioned that I wanted to watch for short-duration, consolidating patterns in the form of tight Flags or Pennants. One has appeared on the daily chart, and a break above 38.55 would trigger a buy signal.
Currencies
The big development this past week was the continued weakness in the USD. I will submit a post on Tuesday that will include Forex crosses covered in past Weekly Reports, and what we might expect in Currency markets in the coming weeks and months.
DXY
Last week we saw the expected follow through to the downside in the Dollar Index. Next stop should be around the 2018 lows in the 88.25-88.50 area.
CEW
Continued strength in the Emerging Currency Strategy Fund speaks to broad USD weakness.
EUR/USD
Last week's price action confirmed the breakout in the Euro. The initial target lies at the 2018 highs around 1.2500. If we view the recent consolidation as a half-mast flag, then the measured move would sit at 1.3000. I generally only view pennants and flags on daily charts that are no longer than three weeks in duration, but I wanted to include this interpretation as a possibility.
USD/CHF
Like the Euro, the Swiss Franc completed its recent consolidation last week. The initial target in the USD/CHF sits around the 2015 lows.
CAD$
The CAD$ finally broke out. It was a clean breakout with immediate follow through. I get the feeling the .7700 level will not experience a retest.
AUD/JPY
I have mentioned in an earlier post the multiple neckline interpretations of the H&S Bottom. I prefer the horizontal versus the upward slanting explanation based on the numerous contact points seen along the grey shaded boundary. I believe we have a breakout in the AUD/JPY. A close above the 2020 summer highs next week would confirm the breakout.
GBP/AUD
A break and close above 1.8475 would complete the H&S Bottom in the GBP/AUD cross.
EUR/AUD
I wanted to include the EUR/AUD for a couple of reasons. First, price action remains in a tight range, and could provide a well-defined risk opportunity. Second, price has repeatedly tested support, and the more a boundary is tested the more likely it is to break.
Crypto
Bitcoin
Next stop for Bitcoin is around $23,000 and the 261.8% Fibonacci expansion level.
Ethereum
Ethereum currently hangs around the 38.2% Fib retracement level from its 2018 highs. Next resistance levels could come in at $732 and $881, and support lies between $440 and $418.
Litecoin
Litecoin consolidates just above the $65 breakout level. A weekly close above $145 could really kick the rally into full gear.
***This will be my last Weekly Report this year. I will regroup and review over the next couple weeks, and plan to put together a year end report. Shorter entries will still be posted throughout the week.
Thanks for reading! If you have any questions or comments, please feel free to contact me at ianculley@culleycharts.com
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.
Comments