Tuesday, January 31, 2017

All Juiced Up, Nowhere to Go, Hangover Tomorrow

Wall Street partied. Me too.  All will be awesome; lower taxes, repatriation, rolling back rules and regs.  Busting up to new highs in a thrust above the trendline cleared out all the shorts. But really since mid Dec, it's been a bit of a slog, with last weeks thrust 50% of the preceding one. 
Market Vanes Bullish Consensus has been at 65% for 3 weeks, and they see overbought as 75%.
 5 Yr.
 click to enlarge
 Note the negative divergence on the 9 RSI (I am pushing it here a little). 

 1 Yr
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The negative divergence here is on the 14 RSI and clear. 
So at what point does the market realize it might have fully discounted all it's hopes, at least for this year?
How about when it overlaps that last thrust up from 2251.75?

 1 Mo. chart
 click to enlarge
Elliott Wave;
I've got the move down from the highs labeled a possible 1, some degree of a sub wave of course.
That would make the next wave lower a 3 after this consolidation up from yesterdays lows completes 2.
And a 3 wave down through the point of recognition would be textbook.

Just so you know there are NO trade recommendations herein. 

Monday, January 30, 2017

Crude Set Up

Crude is set up to cause a lot of pain. Fridays COT revealed further increases in spec net longs;  NYMEX+ICE WTI  +24 million bbl to 396 million bbl, bringing it up to near record levels.
 March WTI, meanwhile, has been pretty much going sideways in a choppy manner.

5 day chart
click to enlarge

1 Mo.
click to enlarge
While it is possible that this pattern is going to break up in the short term, all the spec length will make heavy work of it. This chart shows no evidence of any impulse wave action to the upside and in fact the pattern is more likely a consolidation of the move down from 56.18 to 51.59

 6 mo.
 click to enlarge
If WTI breaks down on the other hand, putting in lows under the .382 retrace at 51.78, the next Fibonacci support levels will get tested as the weak specs run.

The more interesting question is, will the 26.05 low get tested, or is this structure up from 45 going to have another leg after shaking out some length.
3 yr. chart
click to enlarge

Note the long term negative divergence on the RSI. 
 If this is an abc structure up from 26.05,  c = 50% of a. 
Considering the length in the market, it's going to take some doin' to make new highs.

Tuesday, January 24, 2017

USD UP date

Lately the USD has been taking a breather, hence an UP date.
3 mo. chart

1 yr.