The upcoming week should offer a little something for every type of market participant from the casual to the day trader and from the weekly options spread trader to the four-week time frame! My best ideas for narrow range breakouts on trending pivots for trend-chasing traders are the S&P 500 and, possibly, crude oil and bitcoin. Other symbols are creating exciting range trades.
The U.S. dollar appreciated against major rival currencies on Friday. The dollar rally is back on after the two of the largest parties in Italy agreed to form a coalition government and Japanese inflation retreated. Although there is no plan for Italy to exit the European Union it could put it to the test with its fiscal strategy.
The market has been up ever since the S&P 500 (SPX) hit 133-360 minute bars off the top. Prior to that it hit 133 bars on a 180 chart. Prior to that the first leg down was 340 points which found a low at 2532.69. I think that debunks the random walk crowd’s view of all market moves being random for the rest of time. Think about this for a minute.
The U.S. dollar rally lost momentum during the week and recorded its third day of depreciation versus other major pairs. The U.S. dollar continues to gain versus emerging market currencies as more signs of a global growth slowdown appear. The US consumer price index (CPI) came in under expectations and raised concerns on how many rate hikes could the Fed get away with in 2018.
It is the season for trend and breakout traders, according to my chart range statistics, aggregate statistics, and pivots. I do love sideways markets like I love Nashville biscuits with slow-pouring molasses & butter. Trying to pinpoint range reversals is a thrill. However, these breakout markets, at this moment wrecking my range-prediction precision, are teaching me honesty, flexibility, and caring service to others.
Since January I’ve been bearish and I’ve been right. To possibly have to change that bias now could become a pride issue. Am I and those like me to prideful in our views to admit the possibility the market can go back into a sustained rally. Let’s look at the readings. For three months I’ve shown you the Dow vibrations, today we are looking at the SPX. In the SPX we had a 340-point first leg drop. What has that given us? It is the vibrational foundation for the next two lows.
The U.S. dollar rally continues to gather steam as it appreciated against major pairs for a third week. The U.S. nonfarm payrolls (NFP) provided little support with a miss in both the headline job number and the much-anticipated wage growth component. The main takeaway from the jobs report was the drop in the employment rate from 4.1% last month to 3.9%.
My euro bear trade hit all targets early, and I anticipated a Wave Two bounce, but the yen is the symbol tossing a three-day chart hammer candlestick my way on my projected weekly lows and Camarilla pivots (weekly and monthly), with overhead targets of 0.009250-.009300 are expected should it rally.
Are you sad to see April go? I’m not because April showers usually lead to May flowers. Am I in the Twilight Zone or did I actually see the two leaders of the Koreas hug this week? That’s incredible. If you think about it, how many times have I come here in the past year warning about some geopolitical problem on the peninsula that could blow up the stock market?
The U.S. dollar had massive weekly gains against all majors. The release of the gross domestic product for the first quarter of 2018 beat expectations but did little for a dollar that had rallied all week. Dovish central bank rhetoric from the European Central Bank and the Bank of Japan have increased the anticipation for the U.S. Federal Reserve’s Federal Open Market Committee on Wednesday, May 2 at 2:00 p.m. EDT.