Tag Archives: support

Cartography Corner – April 2020

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


March 2020 Review

E-Mini S&P 500 Futures

We begin with a review of E-Mini S&P 500 Futures (ESM(H)0) during March 2020. In our March 2020 edition of The Cartography Corner, we wrote the following:

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

  • M4                 3614.00
  • M1                 3457.50
  • PMH              3397.50
  • MTrend         3166.53
  • Close             2951.00     
  • PML               2853.25
  • M3                 2678.00    
  • M2                 2525.50     
  • M5                2369.00

Active traders can use 3166.50 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 2020 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first trading session of March saw the market price rise, reflecting market participants’ “buy-the-dip” mentality towards February’s weakness and anticipation of the Federal Reserve responding with further monetary stimulus.  The high trade for March was realized during the second trading session at 3137.00, just under our isolated pivot at March Monthly Trend, MTrend: 3166.53.  The following two trading sessions saw lower highs, yet they also afforded market participants reasonable opportunities to sell against March Monthly Trend.  On March 6th, 2020, the market price began to break lower, with clustered support at QTrend: 2974 and Q2: 2934.25 being surpassed intra-session and the market price settling the session below QTrend.

During the following session, March 9th, the market price gapped lower on the open, breaking and settling below another clustered support zone at PQL: 2855.00 and PML:2853.25.  The following two trading sessions were spent with the market price oscillating between PQL / PML now acting as resistance and isolated support at M3: 2678.00.  On March 12th, the market price descended below isolated support at M3: 2678 and M2: 2525.50, stopping short of achieving the Monthly Downside Exhaustion level for March at M5: 2369.00.  The following three trading sessions were spent with the market oscillating between M3: 2678.00 now acting as resistance and support at M5: 2369.00.  The Monthly Downside Exhaustion level was first achieved on March 16th, 2020.

With the market price having achieved our isolated Monthly Downside Exhaustion level, our focus turned immediately to our weekly support levels.  The following four trading sessions, March 18th through March 23rd, saw the market price continue to descend below M5: 2369.00.  The low price for March was achieved on March 23rd at the price of 2174.00.

On March 23rd, the Federal Reserve committed to unlimited quantitative easing (QE).  That action stopped the market price descent and a rally ensued.  The final six trading sessions of March saw the market price rise sharply from the low, with monthly (and weekly) support levels acting as resistance.

Active traders following our monthly analysis had the opportunity to capture a 24% profit.

 

Figure 1:

Gold Futures

We continue with a review of Gold Futures (GCM(J)0) during March 2020.  In our March 2020 edition of The Cartography Corner, we wrote the following:

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

  • M4         1863.70
  • M1         1770.10
  • PMH       1691.70
  • M2         1582.50
  • Close        1566.70
  • MTrend   1560.26
  • PML        1551.10           
  • M3         1545.50                       
  • M5           1488.90

Active traders can use 1545.50 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 2020 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first six trading sessions of March, aided by the Federal Reserve’s actions on March 3rd, saw the market price ascend to and surpass intra-session February’s high price at PMH: 1691.70.  However, the market price did not settle above February’s high.

Over the following four trading sessions, the market price descended through multiple isolated support levels, including our isolated pivot at M3: 1545.50.  On March 16th, our Monthly Downside Exhaustion level for March at M5: 1488.90 was achieved and exceeded intra-session.  The low price for the month at 1451.74 was realized during that session.  The following four sessions were spent with the market price oscillating between clustered support levels at MTrend: 1560.26 / PML: 1551.10 / M3: 1545.50, now acting as resistance, and Monthly Downside Exhaustion level acting as support.

The Federal Reserve announcement of unlimited quantitative easing on March 23rd re-ignited market participant’s enthusiasm for Gold.  The market price cleared the clustered support levels at MTrend: 1560.26 / PML: 1551.10 / M3: 1545.50, now acting as resistance.  On March 24th and March 25th, the market price ascended to and surpassed intra-session February’s high price at PMH: 1691.70.  The final four trading sessions of March were spent with the market price essentially drifting sideways, with a final push lower towards isolated support at M2: 1582.50.

Our analysis essentially bound the realized range for March.

Figure 2:

April 2020 Analysis

E-Mini S&P 500 Futures

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures (ESM0).  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Monthly Trend        2980.56       
  • Quarterly Trend      2918.33
  • Current Settle         2569.75       
  • Daily Trend             2567.31       
  • Weekly Trend          2501.47

In the quarterly time-period, the chart shows that E-Mini S&P 500 Futures are in “Consolidation”, after having been “Trend Up” for four quarters.  Stepping down one time-period, the monthly chart shows that E-Mini S&P 500 Futures are in “Consolidation”, settling below Monthly Trend for two months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P 500 Futures have been “Trend Down” for five weeks.  The relative positioning of the Trend Levels has lost its bullish posture.

We wrote in March, “The final piece of the sustained Trend Reversal puzzle is a quarterly settlement under Quarterly Trend at QTrend: 2974.00.”  March’s settlement completed the puzzle.

One rule we have is to anticipate a two-period high (low), within the following four to six periods, after a Downside (Upside) Exhaustion level has been reached.  We now anticipate a 2-period high in the quarterly time- period over the next four to six quarters, in the monthly time-period over the next four to six months, and in the weekly time-period within two weeks.  This does not mean the market price will immediately reverse higher, as those two-period highs can occur at lower absolute levels.  In our judgment, in bear markets, two-period highs are the safest place to sell. Illustrations of this concept, in the monthly time-period, can be found in our April 2018 commentary.

Support/Resistance:

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

  • M4                 3420.75
  • PMH              3137.00
  • MTrend         2980.56
  • M1                 2876.50
  • Close             2569.75     
  • M3                 2188.50
  • PML               2174.00     
  • M2                 1494.75     
  • M5                950.50

Given that the first monthly resistance and support levels are roughly 300 and 400 points away from the current market price, we suggest active traders rely upon our weekly analysis to guide them directionally.

For less-active market participants with an intermediate or long time-period focus, we suggest using MTrend: 2980.56 and QTrend: 2918.33 as the pivot, respectively.  Maintain a flat or short position below the pivot and a long position above the pivot.

WTI Crude Oil Futures

For April, we focus on WTI Crude Oil Futures (“Crude”).  We provide a monthly time-period analysis of CLK0.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Quarterly Trend    49.79             
  • Monthly Trend      44.43
  • Weekly Trend       26.73             
  • Daily Trend           20.94             
  • Current Settle       20.48

As can be seen in the quarterly chart below, Crude is in “Consolidation”.  Stepping down one time-period, the monthly chart shows that Crude has been “Trend Down” for three months.  Stepping down to the weekly time-period, the chart shows that Crude has been “Trend Down” for five weeks.

Our model got short Crude in January with the break of Monthly Trend.  We had no insight into the actions of Saudi Arabia concerning oil output and pricing.  As we have, please consider the following words of wisdom from Ed Seykota:

“A surprise is an event that catches someone unaware.  If you are already on the trend, the surprises seem to happen to the other guys.”

To our knowledge, no one predicted that Saudi Arabia would boost production and cut its selling price for oil.      

Support/Resistance:

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

  • M4         53.47
  • PMH       48.66
  • MTrend  44.43
  • M1         42.66
  • Close        20.48
  • PML         19.27
  • M3         0.00     
  • M2         0.00                 
  • M5           0.00

Active traders can use 19.27 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 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 2020

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


February 2020 Review

E-Mini S&P 500 Futures

We begin with a review of E-Mini S&P 500 Futures (ESH0) during February 2020. In our February 2020 edition of The Cartography Corner, we wrote the following:

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

  • M4                 3605.50
  • M1                 3421.00
  • PMH              3337.50
  • M2                 3292.50
  • Close             3224.00     
  • M3                 3217.00
  • PML               3181.00     
  • MTrend         3180.97     
  • M5                3108.00

Active traders can use 3217.00 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 February 2020 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first four trading sessions of February saw the market price rise, reflecting market participants’ bullishness toward the recent directional bias.  On February 6th, the market price exceeded, and settled above, January’s high price at PMH: 3337.50.  The market oscillated around that level for the following two trading sessions, building energy for the next directional move.  Over the following six trading sessions, the market price continued to drift higher, reaching its high settlement price for the month on February 19th at 3387.25.

During the following session, February 20th, the market achieved its high price for February at 3397.50 yet settled down for the trading session.  This small reversal was a precursor to the carnage that ensued.

Over the final six trading sessions of February, risk-management and speculative actions related to fear of the economic impact(s) of the CoronaVirus gripped market participants.  The market price declined (16.02%) peak-to-trough and (12.88%) on a settlement basis.  To the uninformed and unprepared, the rapid decline may have appeared to be unorderly.  However, we know that is not the case…

 

I would like readers to focus on the “anatomy” of the decline:

  • February 20th: The small reversal referred to earlier stopped right in front of PMH: 3337.50, then acting as support.
  • February 21st: PMH: 3337.50 again offered support, with the market price settling at 3339.25.
  • February 24th: The market had an opening gap lower, with the early price action occurring in front of M2: 3292.50, then acting as support.  Once that level gave way, the market price declined to and settled just above our isolated pivot for February at M3: 3217.00.
  • February 25th: Clustered support levels at M3: 3217.00 / PML: 3181.00 / MTrend: 3180.97 gave way, suggesting the market price was going to test the Monthly Downside Exhaustion at M5: 3108.00.  The low for the session was 3117.25.
  • February 26th: The trading range for the session was essentially bound by MTrend: 3180.97 and PML: 3181.00, then acting as resistance, and M5: 3108.00, acting as support.  The market price settled the session at 3110.25, with an intra-session low of 3091.00.

Our clients know that the emphasis we place on our levels increases with the length of the time period.  Quarterly levels, with Quarterly Trend specifically, being the most important.  Coming into the trading session of the 27th, the market had already achieved our isolated Monthly Downside Exhaustion, so what were we to do?  Our focus turned immediately to the quarterly support levels.

  • February 27th: Support at M5: 3108.00 gave way and the market price achieved, and exceeded, Quarterly Trend at QTrend: 2974.00.  The market price settled at 2957.00, in between QTrend: 2974.00 and our next support level at Q2: 2934.25.
  • February 28th: The purpose of every trading session is to surpass the high or low of the previous trading session…  The trading range was essentially bound by QTrend: 2974.00, then acting as resistance, and the previous quarter low at PQL: 2855.00, acting as support.  The low trade for February occurred at the price of 2853.25; purpose fulfilled in both the monthly and quarterly time periods.

Our analysis, yet again, proved its worth to the discerning market participant.  For both long-term investors managing risk and traders actively speculating, our analysis provided a map to profitability.  Subscriptions and referrals are appreciated.

Bitcoin Futures

We continue with a review of Bitcoin Futures (BTH0) during February 2020.  In our February 2020 edition of The Cartography Corner, we wrote the following:

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

  • M4         13,070
  • M3         11,670
  • M1         11,520
  • PMH       9,745
  • Close        9,440
  • MTrend   7,982
  • M2         7,300  
  • PML        6,860              
  • M5           5,750

Active traders can use 9,745 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 2020 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  On the third trading session of February, bitcoin settled above our isolated pivot level at PMH: 9,745.  The following six trading sessions saw the market price rise to a high price of 10,670 on February 13th, with the high settlement price for the month being achieved at 10,525 the session before.

Over the following four trading sessions, the market price descended to and settled back below our isolated pivot level at PMH: 9,475, then acting as support.  The final six trading sessions of the month saw the market price declining towards Monthly Trend at MTrend: 7,982.

Conservatively, active traders following our analysis had the opportunity to monetize a 10.7% profit.

 

March 2020 Analysis

E-Mini S&P 500 Futures

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures (ESH0).  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Weekly Trend         3250.44       
  • Monthly Trend        3166.53
  • Daily Trend             3022.42       
  • Quarterly Trend      2974.00       
  • Current Settle          2951.00

In the quarterly time-period, the chart shows that E-Mini S&P 500 Futures have been “Trend Up” for four quarters.  Stepping down one time-period, the monthly chart shows that E-Mini S&P 500 Futures are in “Consolidation”, after having been “Trend Up” for eight months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P 500 Futures are in “Consolidation”.  The relative positioning of the Trend Levels is beginning to lose its bullish posture.

We wrote in February, “The next event that needs to occur to strengthen the case of a possible Trend Reversal is a monthly settlement under Monthly Trend.”  February’s settlement achieved that.  The final piece of the sustained Trend Reversal puzzle is a quarterly settlement under Quarterly Trend at QTrend: 2974.00.  We eagerly anticipate the settlement price on March 31st.

Support/Resistance:

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

  • M4                 3614.00
  • M1                 3457.50
  • PMH              3397.50
  • MTrend         3166.53
  • Close             2951.00     
  • PML               2853.25
  • M3                 2678.00    
  • M2                 2525.50     
  • M5                2369.00

Active traders can use 3166.50 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

 

Gold Futures

For the month of March, we focus on Gold Futures (“Gold”).  We provide a monthly time-period analysis of GCJ0.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Daily Trend           1627.51         
  • Weekly Trend       1604.79
  • Current Settle       1566.70         
  • Monthly Trend       1560.26        
  • Quarterly Trend     1449.56

As can be seen in the quarterly chart below, Gold has been “Trend Up” for five quarters.  Stepping down one time-period, the monthly chart shows that Gold has been “Trend Up” for three months.  Stepping down to the weekly time-period, the chart shows that Gold is in “Consolidation”, after having been “Trend Up” for eleven weeks.

If not for the agenda of a motivated seller on Friday, February 28th, Gold would have settled above Weekly Trend again.  However, as a technician, my primary job is to recognize the beginning of a new trend, the reversal of an existing trend, or a consolidation area, regardless of qualitative factors.  Adhering to that job, Gold has begun to consolidate in the weekly time-period and is only 6.43 points away from consolidating in monthly time-period.  This deserves attention, as Gold has had quite a rally over the past five quarters.

Support/Resistance:

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

  • M4         1863.70
  • M1         1770.10
  • PMH       1691.70
  • M2         1582.50
  • Close        1566.70
  • MTrend   1560.26
  • PML        1551.10           
  • M3         1545.50                       
  • M5           1488.90

Active traders can use 1545.50 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 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 – February 2020

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


January 2020 Review

E-Mini S&P 500 Futures

We begin with a review of E-Mini S&P 500 Futures (ESH0) during January 2020. In our January 2020 edition of The Cartography Corner, we wrote the following:

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

  • M4                 3475.00
  • M1                 3353.00
  • M3                 3318.25
  • PMH              3254.00
  • Close             3231.00     
  • M2                 3106.00
  • MTrend        3092.44     
  • PML               3069.50    
  • M5                 2984.00

Active traders can use 3254.00 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 January 2020 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first four trading sessions of January saw the market price exhibit “choppiness”, reflecting market participants’ indecision as to directional bias.  Early into the fifth trading session, January 8th, the geopolitical event emanating from Iran caused the market price to achieve its low price for the month at 3181.00.  However, by the end of the day, the market price had recovered and settled back above our isolated pivot at PMH: 3254.00.     

Over the following six trading sessions, the market price ascended to our isolated resistance level at M3: 3318.25.  The ensuing four sessions saw the market price lose its upward momentum, straddling either side of M3: 3318.25.  On January 22nd the high price for the month was realized at 3337.50, in between our resistance levels at M3: 3318.25 and M1: 3353.00.

From January 24th through the end of the month, the market price action was dominated by market participants’ reaction-to and anticipation-of the effects of the Wuhan Coronavirus.  The trading sessions of January 24th and 27th saw the market price decline a total of 86.50 points on a settlement basis.  The final four trading sessions were spent with the market price oscillating around our isolated pivot at PMH: 3254.00.

Conservatively, active traders following our analysis had the opportunity to monetize a 1.78% profit.

  

Figure 1:

Japanese Yen Futures

We continue with a review of Japanese Yen Futures (6JH0) during January 2020.  In our January 2020 edition of The Cartography Corner, we wrote the following:

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

  • M4         0.94068
  • M3         0.93445
  • PMH       0.92659
  • Close      0.92455
  • M1           0.92403
  • MTrend   0.92330
  • PML        0.91195           
  • M2         0.91140                       
  • M5           0.89475

Active traders can use 0.92659 as the upside pivot, whereby they maintain a long position above that level.  Active traders can use 0.92330 as the downside pivot, whereby they maintain a flat or short position below that level.

As you read this, recall that we wrote in January that the annual correlation of daily returns between Japanese Yen Futures and E-Mini S&P 500 Futures is -0.53.  January’s price action in those markets were mirror images of one another.

Figure 2 below displays the daily price action for January 2020 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first four trading sessions of January saw the market price exhibit “choppiness”, reflecting market participants’ indecision as to directional bias.  Early into the fifth trading session, January 8th, the geopolitical event emanating from Iran caused the market price to achieve its high price for the month at 0.93235.  However, by the end of the day, the market price had recovered and settled back below our isolated downside pivot at MTrend: 0.92330.

Over the following six trading sessions, the market price descended to and settled below, our clustered support levels at PML: 0.91195 and M2: 0.91140.  On January 17th the low price for the month was realized at 0.90935.

From January 18th through the end of the month, the market price action was dominated by market participants’ reaction-to and anticipation-of the effects of the Wuhan Coronavirus.  The market price rallied back to, and settled slightly above, our clustered support levels at MTrend: 0.92330 and M1: 0.92403, now acting as resistance.

Conservatively, active traders following our analysis had the opportunity to monetize a 0.81% profit.

Figure 2:

February 2020 Analysis

E-Mini S&P 500 Futures

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures (ESH0).  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Weekly Trend         3285.17       
  • Daily Trend             3265.61
  • Current Settle         3224.00       
  • Monthly Trend        3180.97       
  • Quarterly Trend      2974.00

In the quarterly time-period, the chart shows that E-Mini S&P 500 Futures have been “Trend Up” for four quarters.  Stepping down one time-period, the monthly chart shows that E-Mini S&P 500 Futures have been “Trend Up” for eight months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P 500 Futures are in “Consolidation”, after having been “Trend Up” for sixteen weeks.  The relative positioning of the Trend Levels is beginning to lose its bullish posture.

We wrote in January, “The first indication of weakness will be a weekly settlement under Weekly Trend”.  We now have that indication.  The next event that needs to occur to strengthen the case of a possible Trend Reversal is a monthly settlement under Monthly Trend.  As noted above, Monthly Trend for February is at 3180.97.

Astute readers will notice that January’s low coincided with February’s Monthly Trend level.  Hmmm…

Support/Resistance:

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

  • M4                 3605.50
  • M1                 3421.00
  • PMH              3337.50
  • M2                 3292.50
  • Close             3224.00     
  • M3                 3217.00
  • PML               3181.00     
  • MTrend         3180.97     
  • M5                3108.00

Active traders can use 3217.00 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Bitcoin Futures

For the month of February, we focus on Bitcoin Futures.  We provide a monthly time-period analysis of BTG0.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Daily Trend           9,489             
  • Current Settle       9,440
  • Quarterly Trend    9,239             
  • Weekly Trend       8,830             
  • Monthly Trend      7,982

As can be seen in the quarterly chart below, Bitcoin is in “Consolidation”.  Stepping down one time-period, the monthly chart shows that Bitcoin is in “Consolidation”, after having been “Trend Down” for five months.  Stepping down to the weekly time-period, the chart shows that Bitcoin has been “Trend Up” for five weeks.

With the weekly, monthly, and quarterly trend levels having quietly slipped beneath the market price, it is worth considering that the rally in Bitcoin that began five weeks ago may be just the beginning of a substantial move higher in price.

Support/Resistance:

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

  • M4         13,070
  • M3         11,670
  • M1         11,520
  • PMH       9,745
  • Close        9,440
  • MTrend   7,982
  • M2         7,300  
  • PML        6,860              
  • M5           5,750

Active traders can use 9,745 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 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 – January 2020

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 December

E-Mini S&P 500 Futures

We begin with a review of E-Mini S&P 500 Futures (ESZ9, ESH9) during December 2019. In our December 2019 edition of The Cartography Corner, we wrote the following:

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

  • M4                 3455.00
  • M1                 3255.00
  • M3                 3251.75
  • M2                 3211.00
  • PMH              3155.00     
  • Close              3143.75
  • PML               3033.00     
  • MTrend         3018.97     
  • M5                3011.00

Active traders can use 3155.00 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 December 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first two trading sessions of December saw the market price extend the weakness which began on November 29.  The low price for December was realized during the second trading session at 3069.50, -2.4% from November’s settlement.  

Over the following seven trading sessions, the market price ascended, and settled, above our isolated pivot level at PMH: 3155.00.  Over the following five sessions, the market price continued rising, and settled, above our next isolated resistance level at M2: 3211.00.  On December 27th the high price for the month was realized at 3254.00, in between our clustered-resistance levels at M3: 3251.75 and M1: 3255.00.

The remainder of December was spent with the market price rotating back down to M2: 3211.00, now acting as support.  Active traders following our analysis had the opportunity to capture a 3.03% profit. 

Figure 1:

U.S. Ten-Year Note Futures

We continue with a review of U.S. Ten-Year Note Futures (“Tens”, TYH0) during December 2019.  In our December 2019 edition of The Cartography Corner, we wrote the following:

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

  • M4         131-30
  • PMH       130-16
  • MTrend  130-02
  • Close      129-12
  • M1           128-30
  • M3           128-14
  • PML        128-00             
  • M2         126-30                         
  • M5           123-30

Active traders can use 130-16 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 December 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The second trading session saw the market price ascending, but not settling, above December’s Monthly Trend level at MTrend: 130-02.  The high for the month was realized during that session which coincided with the low price realized by E-Mini S&P 500 Futures.

The following six trading sessions were spent with the market price descending to, and straddling, our isolated support level at M1: 128-30.  On December 12th, the weakness accelerated and continued into the early hours of December 13th.  During that session, the market price descended slightly below November’s low at PML: 128-00, realizing the low price for the month at 127-29, yet settled only one tick off the high of the session’s range.  The remainder of December was spent with Tens essentially bound by M1: 128-30, M3: 128-14, and PML: 128-00.

Figure 2:

January 2020 Analysis

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures (ESH0).  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Daily Trend             3232.36       
  • Current Settle         3231.00
  • Weekly Trend         3202.98       
  • Monthly Trend        3092.44       
  • Quarterly Trend      2974.00

In the quarterly time-period, the chart shows that E-Mini S&P 500 Futures have been “Trend Up” for four quarters.  Stepping down one time-period, the monthly chart shows that E-Mini S&P 500 Futures have been “Trend Up” for seven months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P 500 Futures have been “Trend Up” for twelve weeks.  The relative positioning of the Trend Levels is bullishly aligned.  The market price is above all of them (with exception of Daily Trend) which is bullish as well.

The first indication of weakness will be a weekly settlement under Weekly Trend.  As noted above, Weekly Trend is at WTrend: 3202.98 for this week and is currently developing at 3226.06 for the week of January 6th, 2020.

Support/Resistance:

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

  • M4                 3475.00
  • M1                 3353.00
  • M3                 3318.25
  • PMH              3254.00
  • Close             3231.00     
  • M2                 3106.00
  • MTrend         3092.44     
  • PML                3069.50    
  • M5                2984.00

Active traders can use 3254.00 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

Japanese Yen Futures

For the month of January, we focus on Japanese Yen Futures.  Japanese Yen Futures are quoted with the Yen as the anchor currency.  For example, a quote of 0.92000 means 1 Yen is worth ninety-two cents.  A rising Yen is equivalent to a weaker U.S. dollar.   We provide a monthly time-period analysis of 6JH0.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Quarterly Trend    0.92847         
  • Current Settle       0.92455
  • Monthly Trend      0.92330         
  • Daily Trend           0.92071         
  • Weekly Trend        0.91917

As can be seen in the quarterly chart below, the Yen is in “Consolidation” after having been “Trend Up” for four quarters.  Stepping down one time-period, the monthly chart shows that the Yen has been “Trend Down” for four months.  Stepping down to the weekly time-period, the chart shows that the Yen is in “Consolidation”.

With the intermediate and short-term trend levels having quietly slipped beneath the market price, it is worth considering that the importance of the Yen as a barometer of other asset classes is hard to overstate.  Might the yen be an omen of change in other asset markets?  Please consider the following annual correlations of daily returns between Japanese Yen Futures and other asset classes (futures):

Equity -0.53, Treasury (Price) 0.70, U.S. Dollar Index -0.46, Gold 0.51

Support/Resistance:

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

  • M4         0.94068
  • M3         0.93445
  • PMH       0.92659
  • Close      0.92455
  • M1           0.92403
  • MTrend   0.92330
  • PML        0.91195           
  • M2         0.91140                       
  • M5           0.89475

Active traders can use 0.92659 as the upside pivot, whereby they maintain a long position above that level.  Active traders can use 0.92330 as the downside pivot, whereby they maintain a flat or short position below that level.

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 – December 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 November

E-Mini S&P 500 Futures

We begin with a review of E-Mini S&P 500 Futures (ESZ9) during November 2019. In our November 2019 edition of The Cartography Corner, we wrote the following:

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

  • M4                 3221.00
  • M3                 3093.00
  • M1                 3084.25
  • PMH              3055.00
  • Close             3035.75     
  • MTrend         2950.42
  • PML               2855.00     
  • M2                 2821.00    
  • M5                2684.25

Active traders can use 3055.00 as the upside pivot, whereby they maintain a long position above that level.  Active traders can use 2950.42 as the downside pivot, whereby they maintain a flat or short position below that level.

Figure 1 below displays the daily price action for November 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first trading session of November saw the market price settle above our isolated upside pivot level at PMH: 3055.00.  The market price never looked back. 

Over the following eight trading sessions, the market price ascended, and settled, above our next isolated resistance levels at M1: 3084.25 and M3: 3093.00.  It is worth noting the long lower shadows on the six candlesticks of November 8th through November 14th (highlighted in the chart).  These lower shadows demonstrate the battle between longs and shorts, through increased intra-session volatility, as these isolated resistance levels were reached.  Once the market price settled above these levels, despite the volatility, it never rotated back below them on a settlement basisThese candlesticks provide a good example of why we choose to emphasize settlements in our decision-making framework.

The remainder of November was spent with the market price continuing its ascent towards our isolated Monthly Upside Exhaustion level at M4: 3221.00, stopping short by 2.05%.

Active traders following our analysis had the opportunity to capture a 2.63% profit.   

Figure 1:

New Zealand Dollar Futures

We continue with a review of New Zealand Dollar Futures (“Kiwi”, 6NZ9) during November 2019.  In our November 2019 edition of The Cartography Corner, we wrote the following:

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

  • M4         0.6627
  • M3         0.6558
  • PMH       0.6444
  • M1         0.6426
  • Close       0.6416
  • MTrend   0.6361
  • PML        0.6215             
  • M2         0.6169                         
  • M5           0.5968

Active traders can use 0.6361 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 November 2019 in a candlestick chart, with support and resistance levels isolated by our methodology represented as dashed lines.  The first eight trading sessions were primarily spent with the market price descending to, and settling below, our isolated pivot level at MTrend: 0.6361.  The low settlement price for the month of November was realized on November 8th at 0.6330, 0.48% below the Monthly Trend.  Three trading sessions later, on November 13th, Kiwi traded a big-figure higher, testing our isolated resistance level at M1: 0.6426.  In the November 14th session, Kiwi reversed course again, testing Monthly Trend at MTrend: 0.6361.  Volatility anyone?

The remainder of November was spent with Kiwi ascending back to, and essentially straddling, our isolated resistance level at M1: 0.6426.  After much volatility, Kiwi settled the month of November at 0.6423, basically unchanged from October.  We retain a positive intermediate outlook, for a sustained Trend Reversal, since November’s settlement price remained above Monthly Trend.

Active traders following our work most likely were victims of the intra-month volatility, in the worst-case capturing an approximate 2.00% loss.

Figure 2:

December 2019 Analysis

We begin by providing a monthly time-period analysis of E-Mini S&P 500 Futures (ESZ9).  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Daily Trend             3145.06       
  • Current Settle         3143.75
  • Weekly Trend         3118.03       
  • Monthly Trend        3018.97       
  • Quarterly Trend      2840.92

In the quarterly time-period, the chart shows that E-Mini S&P 500 Futures have been “Trend Up” for three quarters.  Stepping down one time-period, the monthly chart shows that E-Mini S&P 500 Futures have been “Trend Up” for six months.  Stepping down to the weekly time-period, the chart shows that E-Mini S&P 500 Futures have been “Trend Up” for eight weeks.  The relative positioning of the Trend Levels is bullishly aligned.  The market price is above all of them (with exception of Daily Trend) which is bullish as well.

Support/Resistance:

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

  • M4                 3455.00
  • M1                 3255.00
  • M3                 3251.75
  • M2                 3211.00
  • PMH              3155.00     
  • Close              3143.75
  • PML               3033.00     
  • MTrend         3018.97     
  • M5                3011.00

Active traders can use 3155.00 as the pivot, whereby they maintain a long position above that level and a flat or short position below it.

U.S. Ten-Year Note Futures

For the month of December, we focus on U.S. Ten-Year Note Futures (“Tens”).  We provide a monthly time-period analysis of TYH0.  The same analysis can be completed for any time-period or in aggregate.

Trends:

  • Monthly Trend      130-02           
  • Daily Trend           129-17
  • Current Settle       129-12           
  • Weekly Trend       129-10           
  • Quarterly Trend    126-16

As can be seen in the quarterly chart below, Tens have been “Trend Up” for four quarters.  Stepping down one time-period, the monthly chart shows that Tens are in “Consolidation”, after having been “Trend Up” for twelve months.  Stepping down to the weekly time-period, the chart shows that Tens are in “Consolidation”, after having been “Trend Down” for six weeks.  The Trend Levels are beginning to rotate above the market price.

In the monthly time-period, the “signal” was given in August 2019 to anticipate a two-month low within the following four to six months.  That two-month low was realized in November 2019 with the trade below 128-16.

As we stated in our November edition, “Our first priority in performing technical analysis is to identify the beginning of a new trend, the reversal of an existing trend, or a consolidation area.”  The twelve-month uptrend that began in November 2018 has ended.  Only time will tell if this weakness is consolidation or if a new downtrend develops.  

 

Support/Resistance:

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

  • M4         131-30
  • PMH       130-16
  • MTrend  130-02
  • Close      129-12
  • M1           128-30
  • M3           128-14
  • PML        128-00             
  • M2         126-30                         
  • M5           123-30

Active traders can use 130-16 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 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.