As expected from the last post yesterday, the S&P500 made a double top at the triangle resistance (orange triangle), broke down enough for a lower low at the open, bounced off the 55EMA (grey EMA line), retested the support turned resistance (white horizontal line), and finally broke through the 55EMA with conviction, pulling the MACD into bear territory.
On the 4hour chart, the S&P500 broke down below the 55EMA as well as a cross down on the MACD (left panel, below). This intraday price action eked out an inside candlestick pattern that has a bearish bias, especially if it ends down again the next day.
Meanwhile, the USD strengthened (below, top left panel), and is most likely heading towards the upper channel boundary, target marked as a green box. With this concomitant USD strength, we see the USDCHF (USD Swiss Franc, below, top right panel) hitting the earlier marked upside target and reversing with a long bearish marubozu almost engulfing the previous candle. This is indicative of a movement into safe haven, although not in capitulation levels.
Similarly, the TLT ETF (bottom left panel) shows a previously parabolic rally, and now bucking a retracement to gap back up, above the gap, in fervent bind buying. Despite a slowing MACD, this should rally quickly to reach the upper target at the channel boundary.
Gold (lower right panel), however, was muted in its gains as the rising USD probably muted it’s price appreciation. Nonetheless, it is likely to be staging an attempt to break out of the consolidating triangle pattern. Details of the bounce was outlined in an intraday chart Within yesterday’s post.
At this point, it appears as if fear is creeping back into the market with safe haven buying starting again. A follow through, probably from another trigger should find the already set out targets.
Be aware. And consider the opportunities that might be present, if any…
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