Although I don’t anticipate a whole lot of decisive moves the holiday week there are some interesting setups to keep a watch on. The indexes are looking like a deeper pullback is in the cards. Let’s look at the E Minis first. Currently ES is back within a 2703 to 2740 area it was in for about two week.
If we stay here throughout this holiday week we could be setting up for what looks like a head and shoulders pattern with a slope of 2703.
The NQ doesn’t have as clear of a pattern but as of now the daily is below the 8 & 21 day MAs and the MACD has ticked negative so bias is still to the downside with a big support of 7000.
Small Caps broke a Rising Wedge and as usual the pullback so far has been quick and deep. Currently below the 8 & 21 day MAs with a negative tick so again bias is to the downside with a big support of 1618.
Looking across the Pacific the Nikkei futures appear to be setting up a double top with similar indicators as prior noted indexes with support of 21900 – 21980 area.
Given all these indexes have a downside bias only adds another downside bias to them all.
Moving on to energy, WTI oil had a huge week. After OPEC’s big meeting a week ago with promises to increase production the market realized it had been pricing in a bigger, faster production increase and the market reprised in a hurry. Yesterday Trump announced a side deal with Saudi Arabia to increase production by 2 Million barrels a day although the deal is likely to anger Iran and Venezuela. Looking at the weekly, CL is testing a long term channel resistance in place since its lows.
The weekly RSI slope is downward so each swing high is being met with less strength of so I would not be surprised to see CL pullback from this resistance level.
The Metals have all been pretty beaten down on trade war concerns and the USD at recent highs. So much so that many as looking like attractive longs for a bounce or more (except Silver).
As I said, the DXY has been flirting with highs of $95 but a big reversal Friday and USD is looking like $94 will not hold putting 92.50 area in play.
If the USD keeps pulling back this is a bullish catalyst for metals so lets look at some interesting options.
The big news this week about Gold is the Death Cross that occurred (the 50 MA crossing below the 200). The trend is to the downside and not yet oversold but Gold is coming up to a longer term trend support on the weekly so could be near bounce levels.
The big level many Copper traders have been eying is 2.95. Given Copper has been especially hurt with trade war fears given China consumes about 40% of the metal for industrial use any hint of a resolution would be a very welcome news to Copper longs. Given almost at oversold levels and near a bug support area keep you eyes on a long signal.
Platinum has been on a steady downtrend for some time but actually has some bullish RSI divergence. Having respected channel support Friday Platinum actually looks like it may have found a longer term trade bottom than other Metals.
Finally Silver. Unlike the other Metals Silver looks in danger of a deeper correction if cannot regain some bullish momentum quick it has broken pennant support. It should be noted that Silver did break to the upside of the pennant and quickly reversed so it hasn’t exactly holding true to patterns lately and why I’m staying clear of at the moment given other Metals have clearer setups.
Given the shortened trading week keep an eye on the setups and don’t be in a hurry as trading will likely be choppy on low volume. Happy trading and Independence day.