Bullish medium-term chart patterns convince traders to pick up some gold, euro, crude oil, and China at these levels, but they may be dropping Bitcoin, says Trevor Smith of Trevor's Trading.
Traders may already be lightly long in gold and the euro from my last article and/or the weekly charts, keeping in mind the longer-term charts may be bearish. Crude and Bitcoin are also rallying against long-term bearish charts. Joining the chart group is a China ETF, as these historically-uncorrelated asset classes appear to make their turns upside in unison. Will it last, though?
I am not sure the S&P500 futures rally lasts without a pullback—after squeaking out the next new high! September 4-7 are space weather event dates, including solar winds, which may correspond with bearish pricing. Calendar date buyers would automatically enter near September 4 if any pullback lows occur from the monthly-turn sellers who bought toward the end of last month to sell the month’s turn!
Special Coverage/Situational Trade: Checking the option chains for iShares China Large-Cap ETF (FXI), the October-December $47 call strikes have disproportionally high volumes, before January’s chain switches, becoming heavily weighted in bearish puts. Potentially, this is a long-term trade-of-a-lifetime in development, because the yearly chart shows a long narrow range rectangle that will eventually break out into a 20-year price trend in one direction. Licensed to write about futures products, I am leaving this ETF product discussion for a December update, except to say some traders are adding to Chinese technology sector holdings who are already scaled into this long trade.
My last article did use time pivots to predict fairly accurately possible dates for bear trades that were the indices’ lows, in addition to directions of all markets covered herein; I was wrong about the euro in that the reversal turn actually came from a lower price—I thought I might be able to catch the falling safe on the third floor, but price had another plan, which was to crash on down into the lobby to reverse up to today’s 1.184 high, which was near the 1.185 monthly pivot that I still believe “pulls from above.” I hope someone bought that low I tried to pinpoint. 9 of 10 projected ranges printed as of August 31, 2021, if one rounds up the actual euro low of 1.1849 to 1.185 since I usually use four euro digits!
Next Two Week’s Predicted Ranges (Written August 31, 2021)
E-mini S&P 500
High Range 4560-4545; Low Range 4491-4475
Slightly bear-skewed range. Monthly Pivot 4347, Quarterly Pivot (Q1): 4184, Yearly Pivot: 3225;
High Range 50050-47777; Low Range 45400-44077
Bearish ranges likely inaccurate/to be exceeded due to breakout trending character for next two week. until monthly chart 3-wave pattern down continues, if it does; 37587, August’s monthly chart candle is a 20/20 bar (20% range tail on both ends) and could break downside.
High Range 1.185-1.182; Low Range 1.176-1.172
Bullish ranges. 1.185 monthly pivot pulls from above. If it pulls back early week, it may be a second long trade towards 1.186. Still in effect is: “Trade Idea: long euro call spread w/ 1.185-1.190 strikes or 1.195, or a laddering thereof.”
High Range $1846-$1831; Low Range $1795-1779
Neutral-bullish ranges due to bullish weekly/monthly chart hammer candles in context of more bearish higher time frames. Aggressive traders could go long the hammer with small lot sizing, but the trade could wait 3-5 weeks/months to mature requiring longer-dated option spreads.
High Range $7175-7061 Low Range $6729-6662
Bullish short-term ranges with softer high. An attempt by the monthly-chart bear candle to reach the yearly pivot: $40.19, as a sudden, sharp news-sparked price thrust down to $54-$46 that quickly recovers is possible. Weekly chart bullish engulf candlestick pattern is on 500-week moving average support for a long trade continuation.
Prior Predicted Ranges (Written August 13 for August 15-31, 2021)
E-mini S&P 500
High Range 4489-4470; Low Range 4432-4418
Slightly bear-skewed range. Monthly pivot 4347, quarterly pivot (Q1): 4184, yearly pivot: 3225; Early-week, late week, and early next week are time pivots/space weather dates for bearish pricing. Solar minimum cycle is weakening, as geomagnetic disturbances are increasing.
High Range 49550-48005; Low Range 44570-43900
Bullish ranges until monthly chart 3-wave pattern down continues, if it does; 37587, August’s monthly pivot may drag price. 80-day moving average resistance at 42719.
High Range 1.189-1.185; Low Range 1.178-1.170
Bullish ranges. 1.185 Monthly Pivot pulls from above. Trade small due to trending character not favoring reversals. Trade Idea: long euro call spread w/ 1.185-1.190 strikes or 1.195, or a laddering thereof.
High Range $1826-$1799; Low Range $1760-1741
Neutral ranges due to bullish weekly chart hammer candle in context of more bearish higher time frames than the euro. Aggressive traders could long the hammer low with small lot sizing, but the trade could wait 3-5 weeks to mature requiring longer-dated option spreads than this article’s frequency.
High Range $7214-7057 Low Range $6718-6641
Neutral-bullish short-term ranges. An attempt by the monthly-chart bear candle to reach the yearly pivot: $40.19, as a sudden, sharp news-sparked price thrust down to $54-$46 that quickly recovers is possible. Weekly chart hammer is weaker than euro and gold with sellers’ shadow over its top, but rally attempt is coming.
Trevor Smith is a technical market analyst/forecaster who is registered as a Commodity Trading Advisor. You can view Trevor’s Trading here.