Another quiet week in the midst of a large potential volatility shock.

  • U.S stocks continue to volatility contract. Based on factors such as rallies in Europe, hidden buying pressure and increasing “risk on” sector movements, we do believe the next big move will be upwards for U.S stocks. This move would have multi-month potential.
  • Very rapid change of our outlook in FX. The U.S dollar has the potential to now outperform the Euro and Pound. Will be interesting to see how this new development unfolds.
  • Nothing else to know in commodities except another new high made by crude oil. All time-frames pointing north.


Market: S&P500

Reason for observation: Weekly bull flag setup

Short-term bias: Neutral

Long-term bias: Bullish

Bears shot at the downside move looks pretty eroded in the near term. This market is coiled and ready to explode. Do not fade the first large move whether it be up or down. However, “feeling” is the market has a lot of bullish potential based upon the large bottom wicks visible on the weekly chart.


Market: CAC

Reason for observation: Large imbalance move upwards

Short-term bias: Bullish

Long-term bias: Bullish

Any pullback on the daily will setup nice long trades.


Market: U.S Dollar

Reason for observation: Change of character

Short-term bias: Bullish

Long-term bias: Bearish

Finally looking like the U.S dollar will be primed for another upside move on any daily pullback. However, still not enough to invalidate the longer term bearish overhang. Any long trades should not have a long holding period.


Market: USDMXN

Reason for observation: Monthly bull flag setup

Short-term bias: Bullish

Long-term bias: Bullish

Messy charts on the weekly and daily but this long-term consolidation on the monthly has great potential to support a multi-year rally in USDMXN.


Market: Gold

Reason for observation: Weekly consolidation continues

Short-term bias: Neutral

Long-term bias: Neutral

This weekly consolidation box still very much valid. In context, we probably have better odds of breaking it to the upside. Not enough conviction to be bullish in the near term though.


Market: Crude oil

Reason for observation: Daily bull flag trigger

Short-term bias: Bullish

Long-term bias: Bullish

What an absolute gem crude has been to trade. Another pullback resolving to the upside and making new highs.