Market Analysis

The S&P 500 traded perfectly down to major three-star support on Friday and stabilized. As beautiful as the technicals were, (discussed in the ‘Technical’ section below) the bounce from major three-star support caught a tailwind from positive news on U.S.-China trade talks. It was reported that they are paving a path to resolve the trade dispute by November.
Al Brooks provides bar-by-bar analysis on a five-minute chart of the previous day’s prices action in the E-mini S&P 500. This is his analysis for Friday, Aug. 17, 2018.
Commodities tried to turn the corner on reports of low-level talks about a framework to end the trade war and this made everyone realize that perhaps some of the fears of the backlash from a trade war were overblown. China is feeling the pain of the trade war while the United States looks to be gaining. If recent trade trends continue, it is possible that the United States may find it harder and harder to lift tariffs.
The coming week of Aug. 24, 2018, sets up trending pivot math in the Japanese yen, a potential rangebound pivot breakout higher in soybeans, and bulls entering many markets. The S&P 500 appears near highs for next week, but the monthly Camarilla pivot at the 2,867 level seems to make sense to me, so I projected next week’s new high at 2,865 or higher.
A sense of relief was felt across financial markets following the news that Beijing will resume trade talks with Washington next week. Although the chances of a breakthrough deal from lower-level talks are seen as unlikely, the meeting could be a positive step towards easing trade tensions between the world’s two largest economies.
The S&P 500 made a five-wave rally from the 2802 level.
AUD/USD is unraveling a nice and clear five-wave rise from the lows.
U.S. benchmarks are off yesterday’s swing high and the S&P 500 is contained below resistance as the week looks to wind down. Geopolitics remain in the headlines and the White House said it will ramp up sanctions on Turkey after the country hasn’t released the American pastor from house arrest.
The dog days of August that have set in on the moves in the commodities have been exaggerated. While crude oil holds the 200-day moving average, after a major seasonal sell-off, the concerns about a serious demand slowdown are most likely overblown. Turkey, of course, is a major oil producer and Consumer. NOT! The fears of contagion, steaming from the stepped upped pressure from the Trump Administration, has been overdone. We are in the dog days, and oil bears have begun licking their chops, mistaking seasonal weakness for a major bear turn in the market.
Al Brooks provides bar-by-bar analysis on a five-minute chart of the previous day’s prices action in the E-mini S&P 500. This is his analysis for Thursday, Aug. 16, 2018.