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When Every Pullback Fails: How to Trade a Liquidating Market
A market falls sharply. You buy what looks like a bargain. Prices bounce briefly, then selling resumes and another low appears. This is where knowing how to trade a liquidating market pays off… READ MORE
US500 4 HOUR (CFD): Obstacle to 7718
What caught my eye is not only US500 extending its high but its pause around the 4 hour trendline, which needs to be broken along with 7648 to put 7718 in play. The significance of 7718 is that it is the last significant high before the low at 7295, which needs to be broken to confirm the end of the move to the downside and put bulls in control. Support at 7576-7600 needs to hold to keep a bid but only sub-7459 would negate the current up episode.
USDJPY 4 HOUR: 160 LOOMS
USDJPY will be a focus following the breakout of a 2+ month range top at 159.03 put 160 on the radar. While talk will be whether the BOJ looks to defend 160 (watch for verbal intervention), the level it does not want to see broken is 160.38. Othewrwise, only sub 159 would dent the risk.
EURUSD WEEKLY: Long standing target
It seems eons ago that Bobby and I both pointed out 1.1065 as a potential target. The break to a new low has put it on the radar but that would depend on whether 1.1104 becomes resistance. If not, then needs to trade below 1.1131 to stay offered. A firm break of 1.10965 would put 1.10 on the map.
USDJPY DAILY: Trying for a breakout
As noted yesterday, the break of a 7-day pivot around 158 sent a bullish signal. The break of this pattern along with higher US bond yields and a generally firmer USD made the BoJ’s job a lot more difficult if it chose to defend 159.03, which has been the top of the range since the start of September. Should the break above 159.03 be extended, there is a clear path to 160 although a nervous one given the intervention threat. Current supports; 158.65-75.
EURUSD 4 HOUR: Power of 50 strikes again
What should have caught your attention today is the Power of the 50 level, with moves outside of 1.1150 and 1.1250 not following through (range 1.1145-1.1251).
With EURUSD back on the defensive below 1.12, the current focus is on 1.1150 while trading is within 1.11-1.12.
Market Update: Indices (CFDs 4 HOUR)
At this time yesterday the focus was on down trendlines, especially the NAS100 and then shifted to the up trendlines today as risk off took over as bond yields spiked following the hotter US CPI.
This leaves both indices in limbo heading into the Veteran’s Day holiday where liquidity will be thinned by government and banks closings while stock markets are open. Canada is closed for a holiday as well.
See charts for levels to watch.
USDJPY 4 HOUR: BOJ’S job just got harder
If the BOJ hopes to defend 159.03 to prevent an open door to 160, its job just got harder. It is not only higher US yields and a generally firmer dollar but the likelihood that a 7 day pivot around 158 will be broken tomorrow (bullish). To expose 159.03, needs a firm break of 158.76. In any case, expect support on dips un;less 158 prints again
US500 4 HOUR (CFD): 7500 remains a focus
US500 post-CPI dipped to 7486 and recovered back above 7500. The bounce needs to clear 7576 to put the descending trendline back in play. Below 7486, focus would shift to the rising trendline and then 7348. Test for stocks is whether they can withstand the headwind fron rising bond yields.
NAS100 (NASDAQ) 4 HOUR (CFD): Relief rally or more to it?
The bounce from the 26638 (red line) higher low so far stalled above 28000 as the descending trendline held. On the downside, break of the trendline drawn off higher lows and 26638 would be needed to expose the 26244 swing low. Otherwise, to make it more than a relief rally where 28336 resistance that preceded the 26244 low is the key level to break to challenge the downtrend.
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