Here are the Closing Prints and what I think we are looking at going forward.
We are going to call this week “What are the Odds?” I believe this is a perfect title for many of the charts that we are going to look at especially in currency land. Lets dive in with those first.
USDJPY – Yen
Below is the chart of the dollar-yen spot price. The yen has been overly devalued over the past two months and put in a MEGA doji. This is a large sign of indecision deciding whether to continue higher or pull in lower. The USDJPY is up over 16% over the last 2.5 month. So lets play the “odds” game and say you missed the move. Which side of the boat are you on now? Are you going to chase the higher, or play the pull in?
If you pick the former that is ripe for bankruptcy. You do not chase at the TOP end of the risk range. Upside to 119? Downside to 108-110? I’ll bet the latter on this every time. With this indecision candle I believe the USDJPY is telling you down and down Next Week.
GLD – Gold
This leads me into my next currency of Gold. Recently the unwinding of the largest short position in gold in a very long time has started. Now I believe this is leading the USDJPY. Look below, what are the odds and the range? Downside to 1120 and upside 1250?
Gold is bouncing and bounced hard after the entire 2016 move was unwound and puked at the bottom. With the SLV:GLD ratio looking up I believe it is a good bet to play this long. Gold hit 1180 and I believe the 1180-1200 range was the place where I said “THIS IS WHAT MATTERS”. With USDJPY set to drop and drop soon, it will only boost Gold more and I believe over this weeks high it gets a boost over 1200.
EURUSD – Euro
This is my favorite play and I am Long this (consensus is short, very short by the way). Look below at this chart. What do you see and what are the odds? I see the downside range to 1.03 and upside to 1.10-1.15? I see a failed breakdown and reversal weekly close. The bears had 3 weeks to break this down and failed. I am looking for OVER 1.065 next week and if that happens LOAD THE BOAT.
There is very minimal risk for this trade especially if you zoom out. A failed breakdown reversal on the weekly time frame. I don’t care about opinions and this or that. I care about MANAGING RISK and PRICE and I am looking at this long. If I am wrong I will reassess but this looks like the bears FUMBLED.
TLT – Bonds
Bonds are bouncing and going higher. TLT closed over the 200 day MA and heading back towards 125. Believe me I know that this chart is damaged but things do not go down forever. With the options call buying favorable at the bottom I believe we will be seeing 125 before 119. Even if this drops again I am thinking 118 holds at least one more time. I have a long TLT idea that has been open and is in the green.
USO – Oil
Oil is at a very tricky area. After the OPEC deal candle 6 weeks ago it has grinded higher. What are the odds? I believe that oil has some decision making coming soon. Does this continue higher? Possibly. Would a pullback be welcomes by bulls? I think so. As long as Oil holds 51-52 I believe the odds are in the bulls favor. Lower gets more tricky.
DJIA – Dow Jones Industrial Average
Boom! What are the odds this continues higher over the near term and a pullback not happen? Slim to none. I said last week this comes down and it comes down now. My position has not changed. Once Twenty – F******-Thousand is hit this comes down and comes down hard.
Are there no buyers above 19,999? Are people done buying this? apparently so because No One wants to buy the big 20K. We come down and come down fast soon in my opinion.
SPX – S&P 500
This is at the top end of the range and closed out at an All Time high. Can this go higher, maybe? But I don’t think so. See the DJIA above. This election move is about to unwind.
DJIA and SPX do not matter one bit.
It is all about the USDJPY. Once this starts to unwind the beloved stock market comes down with it.