Quietest week since we started recording standard deviation of weekly returns. Not even a single market moved even 1 sigma. Not to sound lame but it does seem as if this is the calm before the storm.

  • Large cap U.S stocks look promising to make new all time highs in the next few weeks. The NASDAQ is almost already there. This move is supported again by the charts and by many underlying points (small cap out-performance, consumer discretionary outperforming consumer staples, technology stocks exploding higher). Do not fade an upside breakout in large cap U.S stocks.
  • Dollar looks vulnerable for a pullback in the near term but this will likely to lead to bullish setups. Many crosses ready to get moving once again. Pretty crazy volatility coming into the U.S bond market. Sidelines seem like the best place for traders to be in the market.
  • Gold breakdown next week looks probable, same setup is not really visible in Silver. Crude oil has a small change of character and now shorts are valid in the near term.


Market: S&P500

Reason for observation: Daily bull flag trigger

Short-term bias: Bullish

Long-term bias: Bullish

Nice close to the week for U.S stocks. Sure looks like all timeframes are a go for another shot at previous highs made at the end of 2017.


Market: FTSE

Reason for observation: Daily bull flag setup

Short-term bias: Bullish

Long-term bias: Bullish

After a massive run up European stocks are cooling off. However, this daily bull flag tilts the odds of another move higher.


Market: U.S Dollar

Reason for observation: Short-term overextension

Short-term bias: Bullish

Long-term bias: Neutral

U.S dollar looking somewhat overextended in the short-term. This does not mean shorts are validated. Any pullback on the daily will likely lead to future long trades.


Market: 20 yr U.S tsy

Reason for observation: Change of character

Short-term bias: Neutral

Long-term bias: Bearish

After large volatile moves up and down, the high probability is sideways/choppy trading action. Best to avoid U.S bonds for the time being.


Market: Gold

Reason for observation: Daily bear flag setup

Short-term bias: Bearish

Long-term bias: Neutral

Nice little short play in Gold. Shorts are valid on a breakdown of this bear flag.

 


Market: Crude oil

Reason for observation: Daily bear flag setup

Short-term bias: Bearish

Long-term bias: Bullish

Anti-pullback play in crude oil. First pullback after a trend change has good odds of continuation. The measured move on the daily is a decent road map to where the short-term sell off my run out of steam. This would not impact the longer term bullish structures.