Good Morning Traders!
SPs opened down Sunday evening on news that the Ukraine and Russia failed to reach a deal over gas prices. The market had been correcting overbought conditions the past few trading days. The Summation tick indicator corrected back to neutral but did not hit oversold readings. The closing tick indicator is coming off a sell signal and is still at slightly overbought levels. The Dow corrected daily sell divergences back to its daily EMA – the daily EMA for the SPs now comes in at 1914.25
The Russell closed with a three bar triangle pattern. This also shows up on the 120 minute chart (see below). The daily charts have an A B C structure to the upside but the new momentum highs on the last swing up can lead to another wave up after consolidation. It will be interesting to see how Monday’s session closes for the Russell. A large opening gap on Monday morning can lead to a trend day in either direction (though this was not the case with the gap down last week).
Of particular note: This Friday will be the second triple expiration of the year.
The metals came to life last week – the daily silver chart below suggests that silver may take out the upper end of the trading range sown after a small bear trap at the lower end of the range. 1987.5 is 20 day high. 2000.5 is the major swing high above that. For gold, 1283.3 was a breakdown pivot. The market may have initial resistance at this level.
Grains rolled last week – trade Nov beans and Sep wheat and corn. The Nov Bean contract has formed a coil and also has a three bar breakout pattern.
Have a great trading week!