• Not much has changed in U.S stocks. Large cap indexes such as the S&P500 and Dow Jones have lagged in relative performance to the Nasdaq and Russell 2000. Europe quickly reversing short-term bullish potential. Emerging markets under-performance is glaring and worth noting.
  • Not much really new in FX. USDCAD breaking to new highs on the daily is probably really the only thing that stands out. The sideways action in U.S treasuries is likely to lead to a large move in the near future.
  • Copper quickly erasing any bullish setups. Crude oil rallying almost 2 sigma on the week is significant.


Market: S&P500

Reason for observation: Daily bull flag setup

Short-term bias: Bullish

Long-term bias: Bullish

In context of the longer term weekly bull flag breakout, this shorter term pattern on the daily is very bullish as well. Wait for a break above the upper trendline before placing any additional long trades.


Market: Emerging Markets ETF

Reason for observation: Change of character

Short-term bias: Bearish

Long-term bias: Bullish

Certainly this thrust down last week is bearish as is. Now pushing the lower Bollinger band on both the weekly and daily charts. The one light of hope is on the monthly chart. Looks like a clean bull flag setting up. This play will obviously take a long time to unfold but would be extremely bullish with potential multi-year implications.


Market: AUDUSD

Reason for observation: Daily bear flag trigger

Short-term bias: Bearish

Long-term bias: Bearish

Good downside last week. The rally on Friday could have hit stops on short trades. However, the end of the selling is far from over. Any pullback is likely to set up future short trades.


Market: 20 yr U.S tsy

Reason for observation: Volatility contraction

Short-term bias: Neutral

Long-term bias: Bearish

Nailed the sideways call a few weeks back. This volatility contraction is likely to have multi-week follow through whichever way it breaks. In context, a breakdown is more likely than a breakout. Traders would still benefit from being on the sidelines in U.S bonds.


Market: Copper

Reason for observation: Failure of bullish patterns

Short-term bias: Neutral

Long-term bias: Bullish

This is what mean reversion looks like in textbook form. Instead of the upthrust followed by a small pullback, we saw a sharp return to previous price levels. That is not a pullback we are justified in buying.


Market: Crude oil

Reason for observation: Failure of bearish patterns

Short-term bias: Neutral

Long-term bias: Bullish

The sharp reversal on Friday is more than enough to return our short-term bias back to neutral for now. A bullish setup is still unclear, this chart will likely need more time to shape until our style of trading will have another long entry triggered.