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Markets closed lower on Friday with a clear setup to go short in the stock markets, but is this a short yet or are there hidden signs of strength?  We continue to see buyers stepping into any selling pressure across several markets, from stocks to Bitcoin and gold, so the rally may not be over yet.

Bitcoin

BTCUSD

The consolidation continues and is tightening for nearly a month now, and for crypto participants it has been like watching paint dry.  But yet again we are signs that buyers are stepping into any selling pressure.

Nothing has changed since last week, though we do have a trade pending and waiting to trigger.  Unless you are daytrading there is nothing to do here but wait.

The upper end of the boundary is 10k with the lower 8650, but over the last month that boundary has narrowed between 9200-9800.  We expect a decisive and strong swing one way or the other once the boundary is taken out.

Structure still points to a move higher and the longer it consolidates above 8650 the probabilities increase for a swing higher.  Honestly I wish I could write more, but it would be fluff, when nothing has changed over the past week.

Invitae

NVTA

One stock we have been adding to  is Invitae corp, which falls in the genetic or medical diagnostic sector.  Reason I bring this chart up is to show an example of a consolidation and breakout.

We need to see continuation here, but probabilities favor a move to the low to mid 20’s from here.  This has been consolidating since April, and often traders with little patience will give up before the breakout happens, then kick themselves in the butt for missing the move.

We have a game plan for the week, now it is up to the market.  It is that simple, we are looking for longs until proven otherwise.

S&P Futures

ES1!

After the market close last Monday, we were looking at two levels, 3113 for a bullish continuation and 3020 for support.  The market failed to take out 3113 over the next couple days even showing a short signal, but this is not a short yet, at least on the time frame we trade which is a swing trade time frame.

What we have is an established high and an established low off the 2920 level.  Some may look at the current structure and say “look lower high, should make a lower low, but not so fast.

This is often true when prior momentum is in favor of a continuation, but the prior structure is still bullish, so this minor lower high does not carry as much weight.

We also know that generally corrective structures come in 3-5 wave cycles.  The question here is this a 3rd leg of the corrective structure or setting up for a leg lower?

Until we see more structure, or we take out one of the support or resistance levels we have to remain with the prior trend.

What we are looking for now that the 3020 level has been tested is a how the market plays out if and when we get a push back into the 3113 level.  Do we get a failed high, higher low or does the market push through, close above and continue higher.

Until we get additional evidence that the market is attempting to reverse we remain long for our interim target of 3200, until there is evidence that nullifies the thesis. .  There are numerous ways this can play out, all we can do is continue to gather evidence and adjust moving forward.

Gold

XAUUSD

Another good example of a broad consolidation and potential break of the range which should push Gold into the 1800’s.  We have a few trades ongoing in Gold and Miners, and though there is a bearish pinbar forming (though a lot of time left till it closes), this is a very risky short.

Shorter term traders often see a ranging market and short the upper boundary, go long the lower boundary until it breaks range.  What can happen here is we get a short signal, shorts pile in, but look at the prior structure. Not at all bearish, so look for a short signal and potential short squeeze over the next few trading days for a swing to 1800.

Again there is not a lot to do here, we are in a few positions, and now it is up to the market to either take it out, or serve it up.

Dollar Index

DXY

The Dollar is attempting to retest the prior support, now resistance, level around 98.0, and though it appears like a continuation setup for a swing higher, momentum is still bearish.

What we would need to see is 99.0 taken out to change our minds, or something like a retest of 96.00 and bullish reversal to go long the Dollar.

Right now we are still looking for Dollar shorts and there are several setups we are looking at this week including the Kiwi, and Euro.  We are looking to send out a trade later in the day, after we see how the cash market opens and more importantly how it closes.

 

Oil

USDWTI

Oil is pushing higher, but I do not like the swing here as it is showing signs of selling pressure as it grinds higher.

We issued an alternate trade to some of our more aggressive traders, hitting the first target, but it was a little to aggressive for us to take personally in this position.  We made that clear this was for the more aggressive trader.

What we want to see is a clear bullish swing, and we are not getting that, though there is nothing saying sell sell sell here either.

We are looking for a pullback to at least the 34.0 level and bullish reversal, but ideally we want to see a broader swing into the 28.0-32.0 support zone and a bullish reversal to go long either oil stocks or futures via CFD’s.

If the S&P pushes higher here, Oil is likely to swing with it.  In the broader term we are looking for longs, but patience is required to allow the market to provide us an opportunity, not force trades.

Since this is an aggressive trade, any short signal in this area would be reason to blow out the position and look for re-entry.  Will update for our members nearer the end of day.

Summary

Still looking for longs, and with several trades hitting their perspective targets we are open to adding another swing trade in stocks.  Several stocks on our list including NVTA, but there are a couple we like better.

As far as Bitcoin goes, patience is required.  We have a trade setup pending and if the market triggers our Buy Stop then so be it.  It is placed at a level where the market has to work to trigger us in.  Giving up a few points, but this strategy keeps us out of a lot of fake-outs.

If it pulls back we will be looking at the 8600-8800 level for a bullish reversal and another trade setup.

As far as Gold goes, we have been building up a stock position in miners and any pullback will be an opportunity to add, or if we get a breakout and continuation to go long.

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