Tag Archives: Palladium

Cartography Corner – May 2019

J. Brett Freeze and his firm Global Technical Analysis (GTA) provides RIA Pro subscribers Cartography Corner on a monthly basis. Brett’s analysis offers readers a truly unique brand of technical insight and risk framework. We personally rely on Brett’s research to help better gauge market trends, their durability, and support and resistance price levels.

GTA presents their monthly analysis on a wide range of asset classes, indices, and securities. At times the analysis may agree with RIA Pro technical opinions, and other times it will run contrary to our thoughts. Our goal is not to push a single view or opinion, but provide research to help you better understand the markets. Please contact us with any questions or comments.  If you are interested in learning more about GTA’s services, please connect with them through the links provided in the article.

The link below penned by GTA provides a user’s guide and a sample of his analysis.

GTA Users Guide


A Review of April

Ultra-Long Bond Futures  

We will begin with a review of Ultra-Long Bond Futures during April 2019. In our April 2019 edition of The Cartography Corner, we wrote the following:

In isolation, monthly support and resistance levels for April are:

  • M4             178-25
  • M3             176-13
  • M1             175-00
  • PMH          168-30
  • Close         168-00
  • MTrend    162-08            
  • PML        158-03
  • M2            157-03                       
  • M5            153-10

Active traders can use 168-30 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Figure 1 below displays the daily price action for April 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  During the first three trading sessions of April, the market price declined 3 points and 9/32nds on a settlement basis.  The price action in early April is a stark reminder of the importance of waiting for the Previous Month High or Previous Month Low to be surpassed, before initiating new longs (PMH) or new shorts (PML).

Over the next five trading sessions, Ultra-Long Bond Futures achieved marginally higher prices, within the context of a consolidation area.  The April 10th trading session settled at the price of 165-14.  The lower boundary of that consolidation area was penetrated during the very next trading session.

Over the following four trading sessions, the market price declined an additional 1 point and 21/32nds on a settlement basis.  The intra-day low on April 17th and the low price of the month were achieved at the price of 162-08.  Our April Monthly Trend Level at MTrend: 162-08 stopped the decline in its tracks.

The final eight trading sessions were spent with Ultra-Long Bond futures rebounding higher off April Monthly Trend.  The final settlement price was 164-09, 1 point and 31/32nds higher than MTrend: 162-08.

Figure 1:

E-Mini S&P 500 Futures

We continue with a review of E-Mini S&P 500 Futures during April 2019.  In our April 2019 edition of The Cartography Corner, we wrote the following:

In isolation, monthly support and resistance levels for April are:

  • M4              3051.25
  • M1              2918.00
  • M3              2890.75
  • PMH           2866.00
  • Close          2837.75        
  • M2              2772.25
  • MTrend     2729.08         
  • PML            2726.50        
  • M5             2639.00

Active traders can use 2866.00 as the upside-pivot, whereby they maintain a long position above that level.   Active traders can use 2772.25 as the downside-pivot, whereby they maintain a flat or short position below it.

Figure 2 below displays the daily price action for April 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first trading session of April saw the market price settle above our isolated pivot level at the Previous Month High, PMH: 2866.00.  E-Mini S&P 500 futures never looked back.

Four sessions later, on April 5th, the market price traded and settled above our second isolated resistance level at M3: 2890.75.  The following four trading sessions saw E-Mini S&P Futures consolidate, centered around that level.  On April 12th, the upper boundary of that consolidation area was penetrated.

The following five trading sessions saw the market price consolidate again, with the boundaries of the consolidation area essentially being M1: 2918.00 and M3: 2890.75.   On April 23rd, the upper boundary of that consolidation area was penetrated.

The final five trading sessions were spent with E-Mini S&P 500 Futures achieving a marginal new high.  April’s settlement price equaled 2948.50, a new all-time high.

Figure 2:


May 2019 Analysis

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Current Settle         2948.50       
  • Daily Trend             2940.53
  • Weekly Trend         2912.31       
  • Monthly Trend        2828.81       
  • Quarterly Trend      2718.86

Of all the levels included in our output, Quarterly Trend is the most important, because it is more secular in nature.  The market price settled back above Quarterly Trend in 1Q2019, leaving the market in “Consolidation”.

Stepping down one level in time-period, the monthly chart shows that E-Mini S&P 500 Futures have been “Trend Up” for four months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P 500 Futures have also been “Trend Up” for seven weeks.

Within the context of the market price relative to the trend levels and the relative positioning of the trend levels to one another, technical analysis of E-Mini S&P 500 Futures is bullish.   

We have written extensively about our anticipation of a two-month high being needed in E-Mini S&P 500 Futures.  We anticipated it occurring in the month of March and it was realized during the second trading session of the month.  The rally from the December 2018 low has completed its objective, and then some.  Despite the bullish technical condition mentioned above, we continue to view this time window and price area as the last and best opportunity to sell longs (get short), anticipating an extended decline in both time and price.  Based upon historical occurrences, we are willing to remain patient until late May / early June before re-assessing our anticipation of a reversal.

We communicated in April our recognition of the risk of a new all-time high, and that high has been achieved.  This has led to multiple discussions with our clients and other market participants regarding right-tail risk, or the risk of the market ascending well above its current record high.  While we remain cognizant of right-tail risk, in our judgment, the realized price behavior of the U.S. Dollar, High-Grade Copper, and WTI Crude Oil (to a lesser extent) combined do not support that outcome.  If market participants are convinced of sustained-and-increasing domestic-and-global economic strength, then we posit that those asset classes offer better opportunities going forward.

Support/Resistance:

In isolation, monthly support and resistance levels for May are:

  • M4              3186.50
  • M3              3059.25
  • M1              3047.00
  • M2             2962.50
  • PMH          2956.50         
  • Close          2948.50
  • PML            2844.50        
  • MTrend      2828.81        
  • M5             2823.00

Active traders can use 2962.50 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Euro FX Futures

For the month of May, we focus on Euro FX Futures.  We provide a monthly time-period analysis of 6EM9.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Quarterly Trend     1.1497          
  • Monthly Trend       1.1333
  • Weekly Trend        1.1293          
  • Current Settle        1.1267          
  • Daily Trend            1.1222

As can be seen in the quarterly chart above, Euro FX Futures have been “Trend Down” for four quarters.  Stepping down one level in time-period, the monthly chart shows that Euro FX Futures have been “Trend Down” for three months.  Stepping down to the weekly time-period, the chart shows that Euro FX Futures are in “Consolidation”.

Technical analysis of Euro FX Futures is unequivocally bearish.  Having said that, there is one technical factor that gives us caution.  The condition was met in 2Q2018 that makes us anticipate a 2-quarter high within the next two quarters.  That would be achieved this quarter with any trade above 1.1695.

Support/Resistance:

In isolation, monthly support and resistance levels for May are:

  • M4         1.1587
  • PMH       1.1386
  • MTrend   1.1333
  • Close        1.1267
  • M3            1.1245
  • M1            1.1237           
  • PML        1.1157
  • M2            1.1129                       
  • M5            1.0779

Active traders can use 1.1386 as the upside-pivot, whereby they maintain a long position above that level.  Active traders can use 1.1237 as the downside-pivot, whereby they maintain a flat or short position below it.

Summary

The power of technical analysis is in its ability to reduce multi-dimensional markets into a filtered two-dimensional space of price and time.  Our methodology applies a consistent framework that identifies key measures of trend, distinct levels of support and resistance, and identification of potential trading ranges.  Our methodology can be applied to any security or index, across markets, for which we can attain a reliable price history.  We look forward to bringing you our unique brand of technical analysis and insight into many different markets.  If you are a professional market participant and are open to discovering more, please connect with us.  We are not asking for a subscription, we are asking you to listen.

Cartography Corner – April 2019

J. Brett Freeze and his firm Global Technical Analysis (GTA) provides RIA Pro subscribers Cartography Corner on a monthly basis. Brett’s analysis offers readers a truly unique brand of technical insight and risk framework. We personally rely on Brett’s research to help better gauge market trends, their durability, and support and resistance price levels.

GTA presents their monthly analysis on a wide range of asset classes, indices, and securities. At times the analysis may agree with RIA Pro technical opinions, and other times it will run contrary to our thoughts. Our goal is not to push a single view or opinion, but provide research to help you better understand the markets. Please contact us with any questions or comments.  If you are interested in learning more about GTA’s services, please connect with them through the links provided in the article.

The link below penned by GTA provides a user’s guide and a sample of his analysis.

GTA Users Guide


A Review of March

Palladium Futures  

We will begin with a review of Palladium Futures during March 2019. In our March 2019 edition of The Cartography Corner, we wrote the following, with emphasis given to bolded excerpts:

In isolation, monthly support and resistance levels for March are:

  • M4             1861.5
  • M3             1703.1
  • M1             1655.2
  • PMH          1525.8
  • Close         1501.5
  • M2          1416.3             
  • MTrend    1306.7
  • PML           1303.2                       
  • M5             1210.0

Active traders can use 1525.8 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Figure 1 below displays the daily price action for March 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  During the first eleven trading sessions of March, the market price oscillated within a 68.5-point range.  The price remained below February’s high price at PMH: 1525.8.

On March 18th, the market price traded and settled above February’s high price.  Over the next three trading sessions, Palladium Futures achieved marginally higher prices, with the high settlement-price for the month of March achieved on March 20th and the high price reached March 21stThe decline that followed was truly awe-inspiring.

Over the following five trading sessions, the market price declined 251.2 points or 15.9% on a settlement basis.  The decline halted at our clustered-support area at MTrend: 1306.7 / PML: 1303.2.  The final trading session saw Palladium Futures bounce marginally from that clustered-support area.  In our judgment, the correction of the parabolic rise in Palladium futures is in its early stages.

Figure 1:

E-Mini S&P 500 Futures

We continue with a review of E-Mini S&P 500 Futures during March 2019.  In our March 2019 edition of The Cartography Corner, we wrote the following, with emphasis given to bolded excerpts:

In isolation, monthly support and resistance levels for March are:

  • M4              3189.50
  • M2              2923.00
  • M1              2919.00
  • M3              2865.00            
  • PMH           2814.00        
  • Close          2784.75
  • PML            2680.75        
  • M5              2652.50       
  • MTrend      2640.42

Active traders can use 2814.00 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Figure 2 below displays the daily price action for March 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first six trading sessions of March were spent with the market price exceeding (intra-day, March 4th) and subsequently declining hard (approximately 100 points) off our isolated upside-pivot level at PMH: 2814.00.

Three sessions later, on March 13th, the market price traded and settled above our isolated upside-pivot level at PMH: 2814.00.  The following six trading sessions saw E-Mini S&P Futures ascend to our isolated resistance level at M3: 2865.00.  The high price for the month was achieved on March 21st at the price of 2866.00.

The final six trading sessions were spent with the price declining back to, and oscillating around, February’s high price at PMH: 2814.00.

Figure 2:

 


April 2019 Analysis

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Current Settle         2837.75       
  • Daily Trend             2819.22
  • Weekly Trend         2817.56       
  • Monthly Trend        2729.08       
  • Quarterly Trend      2718.86

As can be seen in the quarterly chart above, the impressive twelve-quarter uptrend ended in 4Q2018.  As we have stated many times, of all the levels included in our output, Quarterly Trend is the most important, because it is more secular in nature.  The market price settled back above Quarterly Trend in 1Q2019, leaving the market in “Consolidation”.

Stepping down one level in time-period, the monthly chart shows that E-Mini S&P 500 Futures have been “Trend Up” for three months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P 500 Futures have also been “Trend Up” for three weeks.

Within the context of the market price relative to the trend levels and the relative positioning of the trend levels to one another, technical analysis of E-Mini S&P 500 Futures is bullish.   

We have written extensively about our anticipation of a two-month high being needed in E-Mini S&P 500 Futures.  We anticipated it occurring in the month of March and it was realized during the second trading session of the month.  The rally from the December 2018 low has completed its objective.

We continue to view this time window and price area as the last and best opportunity to sell longs (get short), anticipating an extended decline in both time and price.  Based upon historical occurrences, we will know in the next month or so if we are correct in our timing.

We recognize the risks from here as binary: either the market is going to decline substantially or it will achieve new all-time highs.

Support/Resistance:

In isolation, monthly support and resistance levels for April are:

  • M4              3051.25
  • M1              2918.00
  • M3              2890.75
  • PMH           2866.00
  • Close          2837.75        
  • M2              2772.25
  • MTrend     2729.08         
  • PML            2726.50        
  • M5             2639.00

Active traders can use 2866.00 as the upside-pivot, whereby they maintain a long position above that level.   Active traders can use 2772.25 as the downside-pivot, whereby they maintain a flat or short position below it.

Ultra-Long Bond Futures

For the month of April, we focus on Ultra-Long Bond Futures.  We provide a monthly time-period analysis of UBM9.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Current Settle        168-00          
  • Daily Trend            167-29
  • Weekly Trend        164-19          
  • Monthly Trend       162-08          
  • Quarterly Trend     159-12

As can be seen in the quarterly chart above, Ultra-Long Bond Futures are in “Consolidation”.  With a quarterly settlement above 159-12 this quarter, Ultra-Long Bond Futures will be “Trend Up”Stepping down one level in time-period, the monthly chart shows that Ultra-Long Bond Futures have been “Trend Up” for four consecutive months.  Stepping down to the weekly time-period, the chart shows that Ultra-Long Bond Futures have been “Trend Up” for four weeks.

Technical analysis of Ultra-Long Bond Futures is unequivocally bullish.  Having said that, there is one technical factor that gives us caution.  The condition was met in March that makes us anticipate a 2-month low within the next four to six months.

Support/Resistance:

In isolation, monthly support and resistance levels for April are:

  • M4             178-25
  • M3             176-13
  • M1             175-00
  • PMH          168-30
  • Close         168-00
  • MTrend    162-08            
  • PML          158-03
  • M2            157-03                       
  • M5            153-10

Active traders can use 168-30 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

It is worth noting that it is somewhat unusual for stocks and bonds to be as well correlated in price as we saw in the first quarter. The stock market rally and accompanying sharp decline in yields, along with some yield curve inversions, are implying two different fundamental economic stories. We believe that if you can determine which one is right you will have much success over the coming few months.  We caution ourselves regarding the delicate balance between conviction and stubbornness with the following:

Stubbornly maintaining a position based on fundamental analysis in the face of adverse technical indicators and an adverse price trend constitutes a quick method of running up substantial trading losses.  In short, do not ignore the technical action of the market no matter how fundamentally-oriented a trader you could be.

Summary

The power of technical analysis is in its ability to reduce multi-dimensional markets into a filtered two-dimensional space of price and time.  Our methodology applies a consistent framework that identifies key measures of trend, distinct levels of support and resistance, and identification of potential trading ranges.  Our methodology can be applied to any security or index, across markets, for which we can attain a reliable price history.  We look forward to bringing you our unique brand of technical analysis and insight into many different markets.  If you are a professional market participant and are open to discovering more, please connect with us.  We are not asking for a subscription, we are asking you to listen.

Cartography Corner – March 2019

J. Brett Freeze and his firm Global Technical Analysis (GTA) provides RIA Pro subscribers Cartography Corner on a monthly basis. Brett’s analysis offers readers a truly unique brand of technical insight and risk framework. We personally rely on Brett’s research to help better gauge market trends, their durability, and support and resistance price levels.

GTA presents their monthly analysis on a wide range of asset classes, indices, and securities. At times the analysis may agree with RIA Pro technical opinions, and other times it will run contrary to our thoughts. Our goal is not to push a single view or opinion, but provide research to help you better understand the markets. Please contact us with any questions or comments.  If you are interested in learning more about GTA’s services, please connect with them through the links provided in the article.

The link below penned by GTA provides a user’s guide and a sample of his analysis.

GTA Users Guide


A Review of February

WTI Crude Oil Futures

We will begin with a review of WTI Crude Oil Futures during February 2019. In our February 2019 edition of The Cartography Corner, we wrote the following, with emphasis given to shaded excerpts:

In isolation, monthly support and resistance levels for February are:

  • M4             68.38
  • M3             62.17
  • M1             56.19
  • PMH          55.37
  • Close         53.79
  • MTrend     51.28             
  • M2             46.34
  • PML           44.35                         
  • M5             34.15

Active traders can use 56.19 as the upside pivot, whereby they maintain a long position above that level.  Active traders can use 51.28 as the downside pivot, whereby they maintain a short or flat position below it.

Figure 1 below displays the daily price action for February 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  During the first seven trading sessions of February, the market price declined to our isolated downside-pivot level at MTrend: 51.28.  However, that support level held and the price promptly began to rally.

Over the following five trading sessions, the price ascended to and closed above, our isolated upside-pivot level at M1: 56.19.  With February 19th’s settlement price of 56.45, the buy signal for active traders was given.

After achieving marginal-high-closing prices over the next three trading sessions, WTI Crude Oil Futures declined, and settled, below M1: 56.19.  The final three trading sessions were spent with the price ascending back to and closing above that level.

Active traders following our work completed two trades during the month, with one losing trade and one winning trade.  Using settlement prices, the resulting loss equaled 1.23%.      

Figure 1:

 

E-Mini S&P 500 Futures

We continue with a review of E-Mini S&P 500 Futures during February 2019.  In our February 2019 edition of The Cartography Corner, we wrote the following, with emphasis given to shaded excerpts:

In isolation, monthly support and resistance levels for February are:

  • M4              3105.00
  • M3              2903.75
  • PMH           2709.00
  • Close          2704.50
  • MTrend      2631.83        
  • M1              2604.00
  • M2              2564.00       
  • PML            2438.50        
  • M5              2063.00

Active traders can use 2709.00 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Figure 2 below displays the daily price action for February 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first six trading sessions of February were spent with the market price trading on either side of our isolated upside-pivot level at PMH: 2709.00.  The buy signal for active traders was given on February 4th, with that session closing at 2721.25.  That position was closed on February 7th, with that session closing at 2704.00.

Three sessions later, on February 12th, the buy signal for active traders was given again.  The market never looked back, with the high price for the month achieved on February 25th at 2814.00.  For consistent readers of our work, 2814.00 should have significance (more on this follows).  The two-month high we have been anticipating since the December lows would have been achieved on any trade above that price.

The final three trading sessions were spent with the price drifting lower.

Active traders following our work completed two trades during February, with one losing trade and one winning trade.  Using settlement prices, the resulting gain equaled 0.83%.

Figure 2:


March 2019 Analysis

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Daily Trend             2789.64       
  • Current Settle         2784.75
  • Weekly Trend         2748.14       
  • Quarterly Trend      2710.78       
  • Monthly Trend        2640.42

As can be seen in the quarterly chart above, the impressive twelve-quarter uptrend ended in 4Q2018.  As we have stated many times, of all the levels included in our output, Quarterly Trend is the most important, because it is more secular in nature.  With one month remaining in the first quarter of 2019, we are keenly focused on whether the market price will settle the current quarter back above Quarterly Trend (2710).

Stepping down one level in time-period, the monthly chart shows that E-Mini S&P 500 Futures are now in “Consolidation”, after having been “Trend Down” for three months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P Futures have been “Trend Up” for eight weeks.

Technical analysis of E-Mini S&P 500 Futures suggests that the market has turned lower for a sustained downtrend, despite this rally off the December 2018 low.

In our January 2019 edition we wrote, “Currently, we anticipate a 2-month high…”  The time window for that 2-month high is in the next two months if February’s matching of December’s high at 2814.00 does not qualify.  We are not aware of a 2-month high being matched exactly in our historical data across markets.  Regardless, in order to achieve it in March, the market price would need to trade above 2814.00.

The market does not need to immediately “crash” after the 2-month high is achieved.  Although most historical occurrences have seen a prompt reversal into the next leg of the larger decline, there are instances where the market has held steady (pushed slightly higher) for a month or two after the 2-month high was achieved.  Please review the analysis in our January 2019 edition of The Cartography Corner.

Support/Resistance:

In isolation, monthly support and resistance levels for March are:

  • M4              3189.50
  • M2              2923.00
  • M1              2919.00
  • M3              2865.00
  • PMH           2814.00        
  • Close          2784.75
  • PML            2680.75        
  • M5              2652.50       
  • MTrend      2640.42

Active traders can use 2814.00 as the pivot, whereby they maintain a long position above that level and a flat or short position below it. Given the track record of the 2-month high, we suggest strong discipline below 2814.

Palladium Futures

For the month of March, we focus on Palladium Futures.  We provide a monthly time-period analysis of PAM9.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Current Settle        1501.5          
  • Daily Trend            1500.1
  • Weekly Trend        1395.5          
  • Monthly Trend       1306.7          
  • Quarterly Trend     1033.6

As can be seen in the quarterly chart above, Palladium Futures are in “Consolidation”.  With a quarterly settlement above 1033.6 this quarter, Palladium Futures will be “Trend Up”Stepping down one level in time-period, the monthly chart shows that Palladium Futures have been “Trend Up” for seven consecutive months.  Stepping down to the weekly time-period, the chart shows that Palladium Futures have been “Trend Up” for nine weeks.

Technical analysis of Palladium Futures is unequivocally bullish.  In fact, Palladium is currently the strongest market of all markets that we analyze.  Having said that, there are two technical factors that give us caution.  The condition was met in January that makes us anticipate a 2-month low within the next three to five months.  Also, the slope of the Monthly Trend since the rally started in August 2018 is increasing at a sharply-increasing rate.  The ascent is taking on a parabolic nature.

Support/Resistance:

In isolation, monthly support and resistance levels for March are:

  • M4             1861.5
  • M3             1703.1
  • M1             1655.2
  • PMH          1525.8
  • Close         1501.5
  • M2          1416.3             
  • MTrend    1306.7
  • PML           1303.2                       
  • M5             1210.0

Active traders can use 1525.8 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Summary

The power of technical analysis is in its ability to reduce multi-dimensional markets into a filtered two-dimensional space of price and time.  Our methodology applies a consistent framework that identifies key measures of trend, distinct levels of support and resistance, and identification of potential trading ranges.  Our methodology can be applied to any security or index, across markets, for which we can attain a reliable price history.  We look forward to bringing you our unique brand of technical analysis and insight to many different markets.  If you are a professional market participant and are open to discovering more, please connect with us.  We are not asking for a subscription, we are asking you to listen.