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Talking Points

  • Key test for risk coming up
  • USD/JPY struggles higher
  • Gold turned down at key Gann zone

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Price & Time: Was that "the Dip"?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY has struggled higher over the past few days following a successful re-test of the 2x1 Gann angle line of the year’s high
  • Our near-term trend bias is higher in USD/JPY while above 101.50
  • A close over 102.80 will get us more excited about the possibility of a more important move higher in the exchange rate
  • A minor cycle turn window is seen later this week
  • A close under 101.50 would turn us negative on USD/JPY

USD/JPY Strategy: Like the long side while over 101.50.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*101.50

102.10

102.40

102.55

*102.80

Price & Time Analysis: GOLD

Price & Time: Was that "the Dip"?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GOLD is in consolidation mode below a key Gann confluence in the 1315/21 area
  • Our near-term trend bias is higher in the metal while over 1280
  • A move through 1321 is needed to re-instill upside momentum in Gold
  • A very minor turn window is seen today
  • A move under 1280 would turn us negative on the metal

XAU/USD Strategy: Like the long side while over 1280.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1280

1300

1308

*1321

1337

Focus Chart of the Day: S&P 500

Price & Time: Was that "the Dip"?

The S&P 500 needs to be watched closely in coming sessions. Last week’s low near 1900 came a week before option expiration. It is a “coincidence” that just seems to keep happening. This occurrence probably favors general equity strength for at least a few more days, but we maintain the market is not quite out of the woods just yet. The strong bounce over the past few days has many convinced that the “buy the dip” mentality prevails. However, the high in the indices last month came during an important cycle turn window (See "Time to Be Skeptical of Equity Market Strength" from July 14th) that argues equities are susceptible to a drawdown period lasting a few months. The real test for us will come when the index reaches the area between 1954 and 1970. This is just the 61.8% and 78.6% retracements of the July/August decline. If something has indeed changed with respect to the uptrend in stocks and its behaviour then we would expect to see it materialize around there. If the index can just do what it has done in the past and blow right through it we will know there is a good chance that the party is likely to rage on.

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This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.

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