Now Reading
The Final Hurdle
104

The Final Hurdle

The Final Hurdle

by The MoleJanuary 31, 2019

The Fed caves and the bulls run – for now. In a nutshell Fed Chair Jerome Powell told the market exactly what it wanted to hear: No key interest rate change combined with more dovish commentary. Which frankly wasn’t a big surprise as the Fed had pushed rates as high as they could without causing a wipeout in equities.

From a technical perspective the recent bullish action has however not yet eliminated the medium to long term bearish scenario. We may get there soon as the price action is looking encouraging, but the final hurdle for the bulls still lies ahead.

The E-Mini is now in the process of crossing the volume hold with the psychologically crucial 2700 mark positioned smack in the middle. The final hurdle I’m referring to however is positioned about 30 ES handles higher, near 2730.

The 100-day SMA was tested three times late last year and did not budge, which of course was eventually followed by a major sell off. The median of the preceding sideways range almost exactly lines up with the 100-day SMA, which is why I consider it a technically viable resistance zone.

Here’s the long term panel which shows us a successful retest of the 100-week SMA and unless all hell breaks loose today a close > the 25-month SMA appears to be a shoo-in.

After yesterday’s Fed sponsored spike higher it would not be unusual for equities to spend a day or two pushing sideways in order to take profit, gauge momentum, and decide how to re-allocate exposure. The SQN panel supports that view, as does the realized volatility cycle below it.

Gold continues to exploit continued Dollar weakness and has now managed to cross the median of the LT churn zone shown above. It’s amazing to consider that gold basically has been treating water for the past seven years.

Something else is going on however, which may have implications on how trade precious metals going forward:

evil_separator

It's not too late - learn how to consistently trade without worrying about the news, the clickbait, the daily drama and misinformation. If you are interested in becoming a subscriber then don't waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Please login or subscribe here to see the remainder of this post.

About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

BTC: 1MwMJifeBU3YziDoLLu8S54Vg4cbnJxvpL
BCH: qqxflhnr0jcfj4nejw75klmpcsfsp68exukcr0a29e
ETH: 0x9D0824b9553346df7EFB6B76DBAd1E2763bE6Ef1
LTC: LUuoD6sDWgbqSgnpo5hceYPnTD9MAvxi6c
PayPal: https://paypal.me/evilspeculator