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Showing posts from April, 2017

Dollar Index Technical Analysis Adam Smith Associates

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The fall in the dollar shows the potential to extend lower without major bounces. Reason is that the third wave in the fall from the April high was shorter than the first. Meaning that it can fall through the trendline of the lows at 98.50 in a single move in the next drop.


The drop will be watched closely by all currency traders as it would also break the rising trendline from the May 2017 bottom. On this chart we do have a marginal close below the line but a further decline would make it crystal clear.


Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Currency Technical Analysis Adam Smith Associates

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USDINR Again gave up from the 20dma and stared to decline. Draw a falling channel to the fall and we should be in wave v of C again with two fibonacci targets 63.75 and 63.10, either of them could support a bottom. A move above the 20dma would however be the final confirmation as it has been the key resistance zone.


EURO The Euro paused after a 5 wave advance from the April bottom. What may occur is a near term retracement of this rise before the trend up continues. The size of a pullback is hard to gauge right away. A move above the recent high of 1.095 would mean we are extending higher anyway. 1.08 would be the 38.2% retracement support which is just at the big gap up area. Gaps can act as important supports in an uptrend.


USDCNY While the dollar has been falling the Chinese Yuan has spent months consolidating into a triangle which is typically a 4th wave. I was anticipating a larger degree wave 4 formation but this seems like a lower degree case. Point being that it maybe set up for…

CRB Index Technical Analysis Adam Smith Associates

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No clear bottom on the commodity index. The CRB index mostly reflects oil but this time with base metals also down it is leading the way lower. It broke the March low yesterday on the weekly chart below. Making the flat the top wave count for now. This can mean wave 5 of (c) down can continue further to 177, but if 177 breaks 171 or 168 may open up. Deeper than I thought but it means that commodities or at least Oil is in the last push lower. This is surprising since the Dollar is falling already. So I have my fingers crossed. A regular flat meaning a double bottom at 177 is ideal.



Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Commodity Technical Analysis Adam Smith Associates

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Zinc The daily momentum for Zinc crossed over to a buy and at 38.2% retracement of last years entire rally this is a good level near 162 to call a bottom. If we are only bouncing back we go to 175, in case of an X wave we can retrace 61.8% up to 185 and best case scenario is that a new rally has started. Will take each case as it develops. But the trend could be up in the near term from 162.


Crude The hourly chart of crude below shows a ending diagonal and breakout near term so maybe we finally have a bottom in place. 48.87 is the low made yesterday so if it holds we can say that wave b ended and wave c up to 57.50 can now start.


Silver Silver broke the 17.65 low and am considering the same for Silver as well. Wave 2 may change to a larger flat pattern. A 3-3-5 correction from the Feb high means that we can go back to test the 16.78 low, near 61.8% of wave 1.


Nickel MCX Nickel Mcx is falling in 5 waves in wave C. RSI at 28 yesterday was oversold. Lower end of the channel is near 580. At a…

Gold And The Expanded Flat Adam Smith Associates

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The close below the 20dma favors the idea that the 3 wave rise from the point marked A is a-b-c or a B wave. Even though it made a new high. A new high in wave B only happens in expanded flat patterns. In this wave B should ideally not exceed 138.2% of A and it is exactly that. Wave C then = 161.8% of wave A and that gives us a number of 1182 as the potential target. 1182 is also near the Jan'17 swing low and 66% retracement of the entire pattern at 1180. Wave C has to be 5 waves down that goes below the low of wave A [1194].

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Technical Analysis GBP USD Adam Smith Associates

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Here is a big picture possibility with the Pound. For a while I have been clear that the dollar topped and that the Yen and Euro would go up. But the Pound was the outlier. It was forming a triangle as in a 4th wave. But now that prices have moved the other way. I wonder if the GBP is also going to rise on the dollar. That puts the trend into stone then. The dollar goes down against all the AE[advanced economy] currencies. This is a monthly chart from 1980 and you see that the recent low was at the parallel channel of the tops. So the only reason to not consider a bottom was that C=A was not achieved in the last 2 years decline. But that is not necessary. It is possible that wave C completed 5 waves as shown in the second chart below. If true we are at a multi year bottom in the GBP and it goes back to 2.15 against the dollar over 5 years. Yes Long term.


The second chart below shows the markings of 5 waves up for wave C for the USDGBP [inverse of the above GBPUSD]. Channels show how …

Currency technical analysis adam smith associates

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Dollar Index The dollar index sold off big today mostly on the GBP. The decline comes from a falling trendline of the tops made since Dec. This once again indicates that prices will test the lower end of the triangle as averages are already broken. This is near 98.60. However given the wave count I think this time this level should not hold, and we should break right below it and head to 96 near the wave 2 low.


US 10 Years T Notes The bond market has been rallying as expected but the decline in US stocks so far feels muted. However this should change soon if the rally goes on in bonds. The pressure on US indices is visible but the decline so far is not as big as we saw in Europe. The US is waiting for its own triggers maybe. The bond rally does not appear complete in any respect so far and is likely to go on.

Euro The Euro dollar remains bullish trend as today morning the wave iii high was surpassed. This makes the Euro rise impulsive and bullish. The next resistance is at 1.084 and the…

Commodity technical analysis adam smith associates

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Silver Silver is lagging gold on the way up. At some point that can change. Right now the large CFTC positions are working on putting pressure near term but are also indicative of the longer term interest in the metal. The 20dma at 18.10 is an important support to watch and below that 17.70 would be the next in case prices dip further. Silver can react as the base metals are selling off and so could lag gold in the short term. It may catch up later.



Here is the gold silver ration chart when it clearly indicates a break down in the ratio meaning that silver starts to outperform gold longer term. However in the short term that has stopped happening. The ratio is going sideways. I will note when it makes a new low.


Soy Bean Not much has happened since my last post on Soy Bean. The positive divergence on RSI is maintained and momentum indicators have crossed over to the buy side. The important support remains the lower end of this potential triangle at 2830. 2951 and 3115 are the 20/40 day …

Technical Analysis on NYSE Composite Index, Brazil, Dollar Index, Bond Equity Inversion

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NYSE Composite Quarterly divergences on the NYSE Composite have preceded market corrections for the US market. The size varied depending on the time period. 


Brazil A Year back I quoted that I would rather be Long BRIC except the 'I'. From a global perspective that was right given that the Brazilian Bovespa index almost doubled. So now when Brazil counts as a completed 5 wave rise where 3<1 and 5<3 I am concerned. Not long term but for the next year that this market could spend making a wave 2 decline maybe retracing down to the 61.8% mark near 50000


Dollar Index The dollar index opened at the 78.6% retracement mark of the last decline and near the upper bollinger band, and near the falling trendline from the Dec top. 101.50 is therefore going to be an important level to decide which side we are headed from here for the dollar index. The bulls or bears are going to have a run on the dollar from here. Just get the direction right. Staying below 101.50 I would think that a maj…

CAC - Ahead of the French Elections

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CAC - Ahead of the French Elections  The CAC index may top out. Or so the current wave structure suggests. Remember after Brexit I was anticipating that European indices would top out at wave 1 of C shown on the chart. I did not expect wave C to extend into a long drawn 5 wave rise. We are now in the last legs of what should be a 5 wave rise in wave C that has achieved C=A*1.618 in terms of ratio at 5142. So this is a good level for completing this structure. We do need an actual price reversal below the wave IV low that can push weekly indicators into sell mode to confirm this scenario. 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic & international clients. Views expressed in this article are purely of the author - Mr Rohit Srivastava - a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Volatility Divergence And Volatility Index Technical Analysis

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Volatility Divergence The India VIX has been making new lows recently however I published the US VIX 2 weeks ago to show how the new high in the US market was not confirmed by a new low in the US VIX. Now over the last week the US VIX has shot up to a 3 month high. So unless this spike is a one off and drops overnight the rising US VIX should lead the India VIX higher as well. History shows that all big jumps in the US VIX are followed by a jump in India VIX. So Volatility back home maybe about to take off


VIX - Volatility Index The US CBOE Volatility index best known as the VIX has been falling for a year now, with interim bouts of rallies in between. So are we seeing another garden variety bump up in volatility? Given that some of the news is geopolitical it may appear so. But purely on weekly charts the first half of 2015 saw a 5 wave contracting triangle which coincided with a contraction in the Bollinger Bands and then Vols expanded sharply upwards in the months ahead. Since then o…

Currency Technical Analysis Adam Smith Associates

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USD JPY USDJPY breaks the low and starts a minor wave iii decline that can go to 107, and the 5 wave decline may go to 104. But consider the larger picture. We maybe in wave C of a larger degree correction for the USDJPY. If this turns out to be true then we do not stop at these levels. C=A would point to 95. 95 is also 61.8% of wave 1 that took it from 75 to 125. So a larger degree retracement would complete there. Maybe only after that should we consider a bullish case for the USDJPY pair. The Yen bears are going to have to wait. Too many loud and out there



USD INR The USDINR maybe in free fall but the RSI is at 19 for the third time in 2 weeks is very oversold. Now oversold in a falling trend has been meaningless, that is normal. Will it finally be a bottom though? It could be. The waves are in the final legs so it could be anytime. I can't be too bearish on the USDINR given the set up even as it falls. What you do need is a sign of a reversal from actual price movement. When it h…

Commodity Technical Analysis By Adam Smith Associates

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Silver
Silver took support on the averages [19.71] and may have started wave III of 3 up. The fractal points to 19.54$ for this move. Support is also at halfway of yesterdays large trading day near 18$.


Gold Running Flat Consolidation Done Gold - was in a corrective consolidation pattern that made higher bottoms for the last several days. This kind of correction is rare and because it occurs within a rising trend is called a running flat. In this case it fits a rising channel as shown on the chart. It is also a sign of strength in the underlying trend. Staying above the upper end of the channel at 1272 we are in wave iii of 3 that points to 1327 in the coming days



Zinc MCX I have to come to their conclusion that wave 5 ended for many base metals because we are getting deeper retracements. I have already published lower levels for copper and Nickel recently. Zinc I believed that wave 5 made a lower top [called truncated], so it would be wave 1 of 5 and may extend but that was not the case. …