It’s A Good Week For Trading
The charts are pointing to a good week for trading, depending on what you trading and how you trade it of course. What I mean is that it looks like markets from crypto to currency to commodities and equities are on the move. The charts are set up for some text book movements that could become quite large. Some are driven by the Wuhan Virus outbreak but not many. In most cases the virus is an excuse to sell or buy a market already wound up so there are underlying forces at play.
The Cryptocurrency Market
The broad cryptocurrency market has been in rally mode since mid-December. After hitting a peak early this month the market retreat to test support and support has confirmed. Just this weekend coins ranging from Litcoin to Bitcoin and even Ethereum bounced from their short-term EMA’s and began to move higher. Technically speaking, this move confirms the uptrend that began at the end of last year and suggest upward price pressure will continue. Litecoin has been leading the market and continues to do so now. The indicators are still weak but have begun to roll over in what could become a very bullish signal. Stochastic is already showing a weak bullish crossover, if LTC/USD moves up to set a new near-term high the MACD will follow. The target, upon breaking to new highs, is then $66 and $80.
The Dollar Index Is Edging Higher
The Dollar Index is edging higher on a number of underlying factors including U.S. economic health and the Wuhan Virus. The Dollar is supported by the stability of the U.S. economy relative to the world during the trade war, the virus is adding a little updraft with flight-to-safety trading. The indicators are bullish so I would expect to see price action continue to drift higher. The risk is in this week’s central bank meetings which includes the FOMC. The FOMC is not expected to alter policy or even the statement, they’ve returned to “wait and see” mode, so any variation from expectations could be market-moving.
Gold Shines But Resistance Is Capping Gains
Gold prices are edging higher and look bullish. The technical set up is near-perfect with both indicators showing solid buy-signals. The risk is in the resistance. Resistance is at the previous high and capping gains, at least for now. It looks like Gold will test $1,560 but that’s not certain. What is certain is the metal will have to post a solid break above that level, hold it, and close above it for me to be more than casually bullish. That may happen with the FOMC meeting, maybe with the virus, but we’ll have to wait and see. Until then I expect to see some bearish candles start to form.