#WaveAnalysis
#SP500 reversed from key support level 4550.00
• Likely to rise to resistance level 4800.00
S&P 500 index continues to rise steadily after the price reversed up from the key support level 4550.00 (former resistance from the start of September).
The upward reversal from the support level 4550.00 started the active impulse wave 3 of the higher level impulse wave (3).
Given the prevailing daily uptrend, S&P 500 index can be expected to rise further toward the next resistance level 4800.00 (target for the completion of the active impulse wave 3))
#SP500 reversed from key support level 4550.00
• Likely to rise to resistance level 4800.00
S&P 500 index continues to rise steadily after the price reversed up from the key support level 4550.00 (former resistance from the start of September).
The upward reversal from the support level 4550.00 started the active impulse wave 3 of the higher level impulse wave (3).
Given the prevailing daily uptrend, S&P 500 index can be expected to rise further toward the next resistance level 4800.00 (target for the completion of the active impulse wave 3))
#WaveAnalysis
#USDCHF reversed from support level 0.9100
• Likely to rise to resistance level 0.9200
USDCHF currency pair continues to rise after the price reversed up from the support level 0.9100, intersecting with the 61.8% Fibonacci correction of the previous upward impulse from June and the lower daily Bollinger band.
The upward reversal from the support level 0.9100 stopped the previous corrective wave (ii).
Given the strength of the support level 0.9100, USDCHF currency pair can be expected to rise further toward the next resistance level 0.9200 (top of the earlier wave (iv)).
#USDCHF reversed from support level 0.9100
• Likely to rise to resistance level 0.9200
USDCHF currency pair continues to rise after the price reversed up from the support level 0.9100, intersecting with the 61.8% Fibonacci correction of the previous upward impulse from June and the lower daily Bollinger band.
The upward reversal from the support level 0.9100 stopped the previous corrective wave (ii).
Given the strength of the support level 0.9100, USDCHF currency pair can be expected to rise further toward the next resistance level 0.9200 (top of the earlier wave (iv)).
#WaveAnalysis
#BAE Systems reversed from support area
• Likely to rise to resistance level 6.00
BAE Systems continues to rise steadily after the price reversed up from the support area set between the key support level 5.465 (monthly low from September), lower daily Bollinger band and the 38.2% Fibonacci correction of the upward impulse from March.
The upward reversal from the support level 5.465 started the active intermediate impulse wave (5).
Given the clear daily uptrend, BAE Systems can be expected to rise further toward the next round resistance level 6.00 (top of the previous impulse wave (3))
#BAE Systems reversed from support area
• Likely to rise to resistance level 6.00
BAE Systems continues to rise steadily after the price reversed up from the support area set between the key support level 5.465 (monthly low from September), lower daily Bollinger band and the 38.2% Fibonacci correction of the upward impulse from March.
The upward reversal from the support level 5.465 started the active intermediate impulse wave (5).
Given the clear daily uptrend, BAE Systems can be expected to rise further toward the next round resistance level 6.00 (top of the previous impulse wave (3))
Growth in equities goes to smaller firms - a bullish sign
A rally in equities is getting underway in the US markets, with the Nasdaq100 adding 12.7% from its local lows of October 13, when the latest rally started. During the same period, the S&P500 and Dow Jones gained 8.9% and 6.7%, respectively.
Besides Nasdaq's bull run, it is worth noting the Russell 2000 climbing out of its sideways channel since March of this year. The growth of this index, which includes small stock market companies, is a significant signal of the strength of the current rally. It has gained 4.8% versus 3% for the Nasdaq, 2% for the S&P500 and 1.1% for the Dow Jones in the last five days.
The Russell 2000 made new highs a year earlier, with a 50% rise from November to March. We may not see the same amplitude of growth this time, but the timing sets up a strong finish to the year for equities.
A rally in equities is getting underway in the US markets, with the Nasdaq100 adding 12.7% from its local lows of October 13, when the latest rally started. During the same period, the S&P500 and Dow Jones gained 8.9% and 6.7%, respectively.
Besides Nasdaq's bull run, it is worth noting the Russell 2000 climbing out of its sideways channel since March of this year. The growth of this index, which includes small stock market companies, is a significant signal of the strength of the current rally. It has gained 4.8% versus 3% for the Nasdaq, 2% for the S&P500 and 1.1% for the Dow Jones in the last five days.
The Russell 2000 made new highs a year earlier, with a 50% rise from November to March. We may not see the same amplitude of growth this time, but the timing sets up a strong finish to the year for equities.
#WaveAnalysis
#AXP (American Express) reversed from support level 170.00
• Likely to rise to resistance level 188.10
American Express recently reversed up from the support level 170.00, intersecting with the support trendline from January, lower daily Bollinger band, and 61.8% Fibonacci correction of the previous upward impulse from the start of September.
The upward reversal from the support level 170.00 started the active short-term impulse wave 3.
Given the clear daily uptrend, American Express can be expected to rise further toward the next resistance level 188.10 (top of the previous impulse wave 1).
#AXP (American Express) reversed from support level 170.00
• Likely to rise to resistance level 188.10
American Express recently reversed up from the support level 170.00, intersecting with the support trendline from January, lower daily Bollinger band, and 61.8% Fibonacci correction of the previous upward impulse from the start of September.
The upward reversal from the support level 170.00 started the active short-term impulse wave 3.
Given the clear daily uptrend, American Express can be expected to rise further toward the next resistance level 188.10 (top of the previous impulse wave 1).
#WaveAnalysis
#GBPUSD reversed from support level 1.3430
• Likely to rise to resistance level 1.3700
GBPUSD currency pair continues to rise after the price reversed up from the key support level 1.3430 (pervious monthly low from September), intersecting with the 50% Fibonacci correction of the previous upward impulse from 2020 and the lower daily Bollinger band.
The upward reversal from the support level 1.3430 created the daily candlesticks reversal pattern Hammer.
Given the strength of the support level 1.3430, GBPUSD currency pair can be expected to rise further toward the next resistance level 1.3700 (top of the earlier wave B).
#GBPUSD reversed from support level 1.3430
• Likely to rise to resistance level 1.3700
GBPUSD currency pair continues to rise after the price reversed up from the key support level 1.3430 (pervious monthly low from September), intersecting with the 50% Fibonacci correction of the previous upward impulse from 2020 and the lower daily Bollinger band.
The upward reversal from the support level 1.3430 created the daily candlesticks reversal pattern Hammer.
Given the strength of the support level 1.3430, GBPUSD currency pair can be expected to rise further toward the next resistance level 1.3700 (top of the earlier wave B).
Bitcoin updates highs at $68K, pulling up the overall crypto market
Bitcoin has added another 3% since Tuesday morning, pushing to all-time highs above $68K.
CoinMarketCap now puts the value of all cryptocurrencies at 2.944 trillion - one step away from the circular value of 3 trillion.
On Bitcoin’s daily charts, the RSI has reached 69, approaching overbought territory. However, this rarely stops such momentum. Bears tend to come into play only at the signs of exhaustion of the upside momentum.
As we noted earlier, the prolonged consolidation over the previous weeks has allowed the bulls to gain strength for the current spurt. The recent upside momentum could potentially extend to above $83K, up 22% from current levels.
At the same time, meaningful upside and retracement momentum for the entire crypto market suggests a less significant upside potential to $3.1 trillion, up 5.6% from current levels.
Bitcoin has added another 3% since Tuesday morning, pushing to all-time highs above $68K.
CoinMarketCap now puts the value of all cryptocurrencies at 2.944 trillion - one step away from the circular value of 3 trillion.
On Bitcoin’s daily charts, the RSI has reached 69, approaching overbought territory. However, this rarely stops such momentum. Bears tend to come into play only at the signs of exhaustion of the upside momentum.
As we noted earlier, the prolonged consolidation over the previous weeks has allowed the bulls to gain strength for the current spurt. The recent upside momentum could potentially extend to above $83K, up 22% from current levels.
At the same time, meaningful upside and retracement momentum for the entire crypto market suggests a less significant upside potential to $3.1 trillion, up 5.6% from current levels.
The single currency managed to pick up demand from buyers on the downside in the 1.1500 area, falling back to the October lows and briefly renewing its lows from July 2020.
A temporary recovery in the EURUSD exchange rate was facilitated by a fall in US government bond yields from the second half of last week. A reduction in the yield spread reduces the attractiveness of buying US debt securities compared to European ones.
Yields on 10-year Treasuries have now stabilised at 1.48%, near their 50 and 200-day moving averages. A decline from these levels could be an essential first signal to break the uptrend.
A further decline in yields in the USA could intensify the selling of the Dollar.
However, the chances of such a breakdown are slim because of high inflation and reduced asset purchases on the Fed’s balance sheet. These factors simultaneously create upward pressure on yields.
The higher chances that the Euro’s recovery momentum would fade in the coming days.
A temporary recovery in the EURUSD exchange rate was facilitated by a fall in US government bond yields from the second half of last week. A reduction in the yield spread reduces the attractiveness of buying US debt securities compared to European ones.
Yields on 10-year Treasuries have now stabilised at 1.48%, near their 50 and 200-day moving averages. A decline from these levels could be an essential first signal to break the uptrend.
A further decline in yields in the USA could intensify the selling of the Dollar.
However, the chances of such a breakdown are slim because of high inflation and reduced asset purchases on the Fed’s balance sheet. These factors simultaneously create upward pressure on yields.
The higher chances that the Euro’s recovery momentum would fade in the coming days.
Oil is gaining for the third trading session in a row, reaching $83.4/bbl for Brent and $81.4 for WTI. After a corrective pullback to 76.4% of the August-October rally, the first significant Fibonacci retracement, the recovery gains strength.
Oil buyers stepped up late last week on strong US employment data and Saudi Arabia’s December selling price hike on the fundamentals side.
At the same time, buyers should not lose sight of OPEC+ forecasts claiming that global oil production will exceed consumption as early as next quarter.
Investors should also pay attention to the risks of intervention by the US, with a possible announcement this week.
In our view, short-term downside risks to oil now prevail, and the potential for a corrective pullback is far from exhausted. We should not be surprised if we see a new downside reversal in the coming days, which would send Brent below $80 and WTI under $77.
Oil buyers stepped up late last week on strong US employment data and Saudi Arabia’s December selling price hike on the fundamentals side.
At the same time, buyers should not lose sight of OPEC+ forecasts claiming that global oil production will exceed consumption as early as next quarter.
Investors should also pay attention to the risks of intervention by the US, with a possible announcement this week.
In our view, short-term downside risks to oil now prevail, and the potential for a corrective pullback is far from exhausted. We should not be surprised if we see a new downside reversal in the coming days, which would send Brent below $80 and WTI under $77.
Gold made a strong run on Thursday and Friday, adding a 2.8% during these days combined. This jump pushed gold to the important downward trend resistance line, which has been in force since August 2020.
It is still premature to talk about a break of the downtrend, despite several positive signs. Amongst the bullish signals is the retention of quotes above important moving average lines these days.
Confirmation of the downward trend break can be triggered by the consolidation (preferably by the week's results) above $1830. The price has been losing the growth momentum there repeatedly since July.
Amongst the risk factors, equity markets have been rising in recent days on the back of falling long-term bond yields, as developed country central banks have assured markets that they will not raise rates any time soon.
Therefore, gold has yet to prove that the downtrend is broken. If it does, it opens up long-term upside potential for the gold price to the $2600 area.
It is still premature to talk about a break of the downtrend, despite several positive signs. Amongst the bullish signals is the retention of quotes above important moving average lines these days.
Confirmation of the downward trend break can be triggered by the consolidation (preferably by the week's results) above $1830. The price has been losing the growth momentum there repeatedly since July.
Amongst the risk factors, equity markets have been rising in recent days on the back of falling long-term bond yields, as developed country central banks have assured markets that they will not raise rates any time soon.
Therefore, gold has yet to prove that the downtrend is broken. If it does, it opens up long-term upside potential for the gold price to the $2600 area.
#WaveAnalysis
#GBPCAD reversed from key resistance level 1.6870
• Likely to fall to support level 1.6740
GBPCAD currency pair recently reversed down from the key resistance level 1.6870 (former multi-month support from the start of May), intersecting with the 38.2% Fibonacci correction of the downward impulse from the end of October.
The downward reversal from the resistance level 1.6870 started the active minor impulse wave (iii).
GBPCAD can be expected to fall further toward the next support level 1.6740 (low of the earlier impulse wave (i) from the start of November) – from where the price is likely to correct up.
#GBPCAD reversed from key resistance level 1.6870
• Likely to fall to support level 1.6740
GBPCAD currency pair recently reversed down from the key resistance level 1.6870 (former multi-month support from the start of May), intersecting with the 38.2% Fibonacci correction of the downward impulse from the end of October.
The downward reversal from the resistance level 1.6870 started the active minor impulse wave (iii).
GBPCAD can be expected to fall further toward the next support level 1.6740 (low of the earlier impulse wave (i) from the start of November) – from where the price is likely to correct up.
The growth of Latin American currencies marked the beginning of the month. The Brazilian real added 4% to its lows at the start of the month. The Mexican peso strengthened by 3.4%.
Interestingly, the basket of the six major currencies against the Dollar changed little over the same time.
Mexico and Brazil have been actively raising interest rates, not arguing that inflation is transitionary. Conversely, the ECB, the Fed and the Bank of England have surprised with a dovish stance and pointed that the markets were wrong in their rate hike forecasts.
Markets are reacting with buying of currencies of those countries where central banks preferred to raise rates. This trend will only gain strength.
USDBRL and USDMXN are pulling back to their 50-day averages. The development of Peso and Real buying from these levels could accelerate the rise of these currencies, marking a broader acceptance of the idea that a period of bloom is coming for the high-yielding currencies.
Interestingly, the basket of the six major currencies against the Dollar changed little over the same time.
Mexico and Brazil have been actively raising interest rates, not arguing that inflation is transitionary. Conversely, the ECB, the Fed and the Bank of England have surprised with a dovish stance and pointed that the markets were wrong in their rate hike forecasts.
Markets are reacting with buying of currencies of those countries where central banks preferred to raise rates. This trend will only gain strength.
USDBRL and USDMXN are pulling back to their 50-day averages. The development of Peso and Real buying from these levels could accelerate the rise of these currencies, marking a broader acceptance of the idea that a period of bloom is coming for the high-yielding currencies.
Tesla shares took a severe hit early in the week, retreating 20% from last week’s peak levels to $987 at the start of trading on Wednesday.
The price later rebounded to $1067, but it was walking on the edge of a bear market.
Historically, the onset of a bear market is followed by a further decline in quotations by about another 20%.
The 200-day moving average, from which the stock got sustaining support from May to August, was a solid support level for these difficult times.
Given current prices, a day or this week close below $994 would be a technical bear market start, paving the way for a drop to $745. Once again, this could coincide with the level of the 200-day moving average, which now passes through $728 but is pointing upwards.
We also note that along with the rise in price, the rally is getting weaker and weaker, as shown by the series of declining RSI peaks on the weekly charts from 2020 on rising prices. Such divergence suggests the possibility of an even deeper drawdown.
The price later rebounded to $1067, but it was walking on the edge of a bear market.
Historically, the onset of a bear market is followed by a further decline in quotations by about another 20%.
The 200-day moving average, from which the stock got sustaining support from May to August, was a solid support level for these difficult times.
Given current prices, a day or this week close below $994 would be a technical bear market start, paving the way for a drop to $745. Once again, this could coincide with the level of the 200-day moving average, which now passes through $728 but is pointing upwards.
We also note that along with the rise in price, the rally is getting weaker and weaker, as shown by the series of declining RSI peaks on the weekly charts from 2020 on rising prices. Such divergence suggests the possibility of an even deeper drawdown.
#WaveAnalysis
#AUDCAD reversed from support level 0.9130
• Likely to rise to resistance level 0.9235
AUDCAD currency pair recently reversed up from the key support level 0.9130 (which has been reversing the pair from August), intersecting with the lower daily Bollinger Band and the daily down channel from May.
The upward reversal from the support level 0.9130 will form the daily Bullish Engulfing – if the pair closed today near the current levels.
AUDCAD can be expected to rise further toward the next resistance level 0.9235 (which has been reversing the price from the start of November).
#AUDCAD reversed from support level 0.9130
• Likely to rise to resistance level 0.9235
AUDCAD currency pair recently reversed up from the key support level 0.9130 (which has been reversing the pair from August), intersecting with the lower daily Bollinger Band and the daily down channel from May.
The upward reversal from the support level 0.9130 will form the daily Bullish Engulfing – if the pair closed today near the current levels.
AUDCAD can be expected to rise further toward the next resistance level 0.9235 (which has been reversing the price from the start of November).
#WaveAnalysis
#Silver broke resistance level 24.66
• Likely to rise to resistance level 26.00
Silver continues to rise after recently breaking the key resistance level 24.66 (which has been reversing the price form the start of September), intersecting with the 61.8% Fibonacci correction of the downward impulse from July.
The breakout of the resistance level 24.66 should accelerate the C-wave of the active medium-term ABC correction (2) from September.
Silver can be expected to rise further toward the next round resistance level 26.00 (monthly high from August and the target for the completion of the active ABC correction (2)).
#Silver broke resistance level 24.66
• Likely to rise to resistance level 26.00
Silver continues to rise after recently breaking the key resistance level 24.66 (which has been reversing the price form the start of September), intersecting with the 61.8% Fibonacci correction of the downward impulse from July.
The breakout of the resistance level 24.66 should accelerate the C-wave of the active medium-term ABC correction (2) from September.
Silver can be expected to rise further toward the next round resistance level 26.00 (monthly high from August and the target for the completion of the active ABC correction (2)).
#WaveAnalysis
#Citibank reversed from support level 66.80
• Likely to rise to resistance level 70.00
Citibank recently reversed up from the powerful support level 66.80 (which is the lower boundary of the wide sideways price range inside which Citibank has been moving from July), intersecting with the lower daily Bollinger Band and the daily down channel from October.
The upward reversal from the support level support level 66.80 stopped the previous short-term ABC correction 2.
Citibank can be expected to rise further toward the next round resistance level 70.00 (lying at the middle of this sideways price range).
#Citibank reversed from support level 66.80
• Likely to rise to resistance level 70.00
Citibank recently reversed up from the powerful support level 66.80 (which is the lower boundary of the wide sideways price range inside which Citibank has been moving from July), intersecting with the lower daily Bollinger Band and the daily down channel from October.
The upward reversal from the support level support level 66.80 stopped the previous short-term ABC correction 2.
Citibank can be expected to rise further toward the next round resistance level 70.00 (lying at the middle of this sideways price range).