I have no interest in shorting this market, at least not until something fundamentally changes.

The USD/JPY rallied a bit during the trading session on Friday, especially after the Jerome Powell speech. The US dollar has been rallying quite significantly against the Japanese yen, and it looks like we are ready to continue doing more of the same. I think it is probably only a matter of time before we reach the highest, and then perhaps go up to the ¥140 level. The ¥140 level course is a large, round, psychologically significant figure that a lot of people will pay attention to.

Pulling back at this point in time only invites more buying, because the trend is still highly substantiated, and has been a major factor for so long. The 50-Day EMA sits below, near the ¥134.50 level. The market will continue to see that as a potential support level, and therefore I would be very interested in any drop toward that level. Even if we break down below there, I think there is plenty of support down to the ¥132 level. The ¥132 level has been important multiple times, and therefore it would not be surprising at all to see it serve as a floor.

Japanese Yen Likely to Continue Losing Value

• The Bank of Japan has repeatedly fought against rising interest rates, in an environment that demands them from multiple countries, and therefore it’s all about trying to work against the will of the market.
• This means that you would have to buy bonds in order to drive those yields down, which means you need to essentially print unlimited currency.
• By doing so, the market sees the Japanese yen lose value, as it is being flooded into the market.

On the other hand, we have the Federal Reserve looking to tighten monetary policy, which of course means that we are looking at a strengthening US dollar in general. We have been in an uptrend for quite some time, and it’s worth noting that the market has recently formed a “W pattern”, and that of course is a very good sign. In fact, we are still somewhat breaking out of the pattern, so a measured move could suggest that we could go as high as ¥140 relatively soon. Either way, I have no interest in shorting this market, at least not until something fundamentally changes. The Federal Reserve has reiterated that this trend should continue.

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With everything that’s going on, I believe that crude oil market will continue to be very noisy and difficult to trade, so the only thing you can truly do is keep an eye in your position size.

The West Texas Intermediate Crude Oil market has gone back and forth during the day on Friday, showing signs of hesitation and confusion. It is worth noting that crude oil has a lot of different crosscurrents that it has to deal with right now, and therefore the confusion makes quite a bit of sense.

With your own pal stating that the Federal Reserve is going to be extraordinarily hawkish, it does make a certain amount of sense that we would see oil struggle in this type of environment. If the Federal Reserve slows down the economy, the demand for crude oil should drop. On the other hand, we have a situation where OPEC is talking about cutting output, and that should drive up prices if the supply/demand quotient gets shifted.

Market Awaits Noise

• The market recently had broken out of a “falling wedge”, so in theory, we should go higher.
• At this point, the market is likely to continue to see noisy behavior, but based upon the technical analysis, one would think that we should go looking to the $102 level.
• However, that doesn’t necessarily mean that it has to.

We also have to worry about whether or not the economy is going to be even remotely strong enough to push demand. The situation around the world is deteriorating, so it would make a certain amount of sense that there would be a severe lack of demand. Beyond that, we also have the Iranians possibly getting involved and producing a million barrels of oil for the markets if the nuclear deal gets agreed to. If that’s the case, then it’s obvious that the market would have to pay close attention to the potential oversupply of the markets. With everything that’s going on, I believe that crude oil market will continue to be very noisy and difficult to trade, so the only thing you can truly do is keep an eye in your position size. If we break above the 200 Day EMA and the 50 Day EMA, it suggests that we have further to go, but if we break down below the $90 level, we could break down rather rapidly as well. I think the only thing you can count on is a lot of chop and noisy behavior of the next several days.

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The market is more likely than not going to have more of a “fade the rally” type of situation

The West Texas Intermediate Crude Oil market has gone back and forth during the trading session on Friday, as we continue to see a lot of confusion in financial markets overall. After all, oil is the lifeblood of the markets, so therefore it does make quite a bit of sense that we would see a neutral candlestick as there are so many questions.

• The $87 level underneath has been short-term support, while the $94 level above has been resistance.
• The 50 Day EMA is starting to drop at this point, and perhaps reach the 200 Day EMA.
• We are getting relatively close to a “death cross”, which is a very negative situation, and could send algorithmic traders to the downside.

The market has been drifting lower for a while, and now that we are hanging around this consolidation area, it is worth noting that you could make out a little bit of a falling wedge here, so we might get a bounce. Any rally at this point in time is probably short-lived though, perhaps allowing just a bit of a move toward the $100 level. 

Crude oil forecast for today

One thing that you need to keep in mind is that there is a lot of concern when it comes to global demand, as we are starting to see economies slow down. Furthermore, we also have to keep in mind that the US dollar has been strengthening, and that means it’ll take less of those dollars to buy oil, all things being equal. The market is more likely than not going to have more of a “fade the rally” type of situation, or perhaps just a breakdown below the recent support that allows oil to drop down to the $80 level over the next several weeks.

It’s not until we break above the $100 level on a daily chart that I would consider going long in this market, but I think it would take a significant amount of upward momentum and strength to get there. I just don’t see how that plays out, but you always have to have the other hypothesis in the back of your head, even if it goes against almost everything that you know or see. That being said, until we break above there, I’m looking at rallies as an opportunity to get short again.

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We need to pay attention to the next impulsive candlestick because it could give us a bit of a hint as to where we could go later, and for a bigger move.

• The S&P 500 Index had a wild ride Friday as the interest rate in the United States spiked.
• This is due to a hotter than anticipated jobs number coming out of the United States, which should keep the Federal Reserve relatively tight.
• Looking at this chart, you can see that we dipped quite significantly only to turn around and show signs of life.
• The only thing you can take into account with any certainty is the fact that we are going to have a lot of volatility.

The 4200 level is an area that I think will continue to see a lot of resistance, so you need to pay close attention to what happens in that area if we do rally. If we break above there, then it opens up the possibility of the market going to the 4300 level. The 4300 level is an area that has been rather massive resistance, so I think if we were to break above there then it opens up quite a bit of upward momentum and obviously changes as the overall trend.

That being said, I think it’s going to be very difficult to see that happen anytime soon. Breaking down below the 4100 level, it opens up the possibility of a drop-down to the 4000 level, possibly even the 3900 level which is where the 50-day EMA hangs about.

Wait for an Impulsive Candlestick

The only thing I think you can count on is that it’s going to be very erratic in this market, due to the fact that the market has a lot of crosswinds at the moment. There of course is the idea of higher rates, but there are also concerns about the economy slowing down, as we enter into what could be thought of as “stagflation.” It’s difficult to really get a grip on where we’re going next, but the one thing that I think you can see is that we are at a very important level on the longer-term charts, and we need to pay attention to the next impulsive candlestick because it could give us a bit of a hint as to where we could go later, and for a bigger move. Either way, I think we have a lot of questions to ask this market still.

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Last week’s trading on natural gas prices ended lower on Friday, as the spot natural gas prices decreased in their recent trading at the intraday levels. The price closed on daily losses even by 4.18%, as it decreased by 263 points, after it also rose on Thursday by 14%, and Wednesday, slightly, by 0.24%.

However, the spot natural gas markets (CFDS ON NATURAL GAS) opened their last trading on intraday levels on Monday, July 11th, with an increase due to a price gap and the presence of demand for gas during the weekend period.

Natural gas futures rebounded early Monday, as production fell and demand due to near-term weather remained high. However, the spot month fell by midday as traders digested expectations for a strong storage injection, and struggled to regain momentum.

Gas futures for August in Nymex eventually fell 1.3 cents on the day and settled at $5,510. The September contract fell by about half a cent to $5.482 / million British thermal units.

The results of a Bloomberg survey also showed that the average injection is estimated at 75 billion cubic feet. The forecast extended from 70 billion cubic feet at the minimum to 85 billion cubic feet at the maximum.

Through technical analysis, the price is expected to settle below the resistance level 5.665, amid the dominance of a bearish corrective wave in the short term, with the continuation of negative pressure for its trades.

I anticipate that at the first signs of exhaustion traders will willingly jump into this market and start shorting again.

The S&P 500 was noisy during the Friday session as traders started to focus on the Independence Day holiday. It is worth noting that although there will be a certain amount of electronic trading in the futures market, the underlying index will not be operating. Because of this, liquidity will be a major issue as it is Independence Day in the United States, and quite frankly most participants won’t be involved in the futures market either. You could see rather significant jumps in the price of the futures contract in this scenario, so be cautious about trying to trade this market.

However, when you look at this chart it does tell you that at least there was an attempt to save the S&P 500 on Friday, suggesting that perhaps it is only a matter of time before we get a bit of recovery. The 3900 level above causes a bit of resistance on the way up from when I can see, but I think there’s more of a fight near the 4000 level. The 4000 level also brings in a bit of psychological resistance and the 50-day EMA. In that scenario, I think it’s going to be difficult to get above there, but if we do then I anticipate another leg up to the 4200 level, an area where we have seen quite a bit of selling pressure previously. Anything above that level could change the overall trend, but right now that seems to be unlikely.

As long as the Federal Reserve is going to tighten monetary policy, I find it difficult to think that the S&P 500 has a real shot at a decent recovery. With that in mind, I anticipate that at the first signs of exhaustion traders will willingly jump into this market and start shorting again. Quite frankly, there is a lot of negative news out there, but we have not priced in a lot of the earnings recession that is almost certainly coming down the road. Because of this, I think that the earnings season noises are going to be extraordinary this time and will continue to put a little bit of an anchor around the neck for this market. A breakdown below the lows opens up the possibility of 3500, which I do think is a realistic target over the next several weeks.

The market looks like it’s ready for a bounce, so a short-term trade certainly seems to be setting up.

Gold markets initially looked like they were going to break down drastically on Friday, but turned around quite significantly to form a massive hammer. This is a technically bullish signal, especially considering where it ended up being formed. The $1800 level is an area that has been important more than once, so bouncing from there to form a hammer is a very strong sign. If we can break above the top of this hammer, it’s a bullish enough sign that some traders will jump in and try to pick up gold again.

On a breakout to the upside, I anticipate that the $1880 level will be targeted. This is an area that has been resistance more than once, and therefore I think we could see a bit of difficulty in that general vicinity. Nonetheless, the market could very well end up there quite rapidly as gold does tend to make sudden and erratic moves.

Pay attention to the 10-year yield, because if interest rates in the United States start to rise again, that works against the value of gold. It makes the US dollar more attractive, which works against gold being priced in that same currency. Furthermore, traders would much rather store paper than pay for the storage of massive amounts of gold. Anytime there is yield to be had, gold does fairly poor.

The market looks like it’s ready for a bounce, so a short-term trade certainly seems to be setting up. However, if we were to break down below the bottom of the hammer, it’s very likely that the market could lose $100 rather quickly. Gold has been extraordinarily volatile, but in the inflationary environment that we find ourselves in, it’s probably only a matter of time before gold has its day. I don’t know if Friday was a major turnaround, but it certainly looks as if it could be the beginning of something. Regardless, with the type of volatility that we have seen in multiple markets, you need to be cautious with your position size, especially in a market like this that has low volume. Furthermore, you need to keep in mind that Monday is the Independence Day holiday in the United States, and therefore it’s likely that volume could be a bit of an issue. Electronic trading will of course be available from time to time, but it is not a normal session.

The best thing you can do is wait for another shorting opportunity, one that will probably come in the next couple of trading sessions.

The S&P 500 rallied a bit on Friday as we continue to see a bit of a relief rally. The market looks as if it is trying to reach the 3900 level, an area that previously had been supported. It’s possible that we may see a bit of selling pressure just above, but even if we do break above there, the 4000 level of course is an area that could come into the picture. The 50-day EMA is sitting just above there, and it is starting to reach down there as well. All things being equal, the large, round, psychological significance of 4000 is also an area that could be a bit of a problem.

The S&P 500 has been falling due to the Federal Reserve tightening monetary policy, and of course, that puts a lot of downward pressure on stocks as it builds up the “risk-free return rate”, as bonds are considered to be “risk-free.” Ultimately, this is a market that has a ways to go I think in the short term, but there is a huge amount of concern out there when it comes to the economy, inflation, and of course that monetary tightening policy. In other words, although we are getting a ripping bear market rally, the reality is that these happen from time to time, and then we continue lower.

Nothing has fundamentally changed to make the idea of the market rally for a longer-term move. Ultimately, this is a market that will continue to see a lot of headwinds, especially considering that they will have to write down earnings estimates, as the economy is changing quite rapidly with the consumer confidence deteriorating rapidly.

The Federal Reserve is hell-bent on tightening into this cycle of slowdown, so it does make a certain amount of sense that we would see the stock market price in even tougher conditions eventually. It’s a bit difficult to measure at times, but the attitude and narrative on Wall Street continue to suggest that in the short term there will be plenty of hope, but in the longer term the math does not work out. Unless you have the ability to get in and get out really quickly, the best thing you can do is wait for another shorting opportunity, one that will probably come in the next couple of trading sessions.

The market needs to see signs of strength rather soon, or we could see a major turn in the overall attitude. 

Bitcoin fell a bit on Friday to show signs of weakness but also turned around as the US dollar calmed down quite a bit. Nonetheless, Bitcoin still looks rather negative in general, especially as the US dollar has been so strong. Keep in mind that Bitcoin is a risk appetite-influenced asset, and as long as the risk appetite is all over the place, Bitcoin will continue to be very noisy.

The $40,000 level above will continue to be an area that we need to pay close attention to, as it has offered such a significant resistance barrier. Any rally from the top of this hammer will more than likely go looking to that area, which will be like a magnet for price. Furthermore, the 50-day EMA is reaching the $40,000 level, so I think that adds even more credence to that idea as resistance is being found there.

If we were to break above the $40,000 level, then it is likely that we could go looking to the 200-day EMA, perhaps even the $45,000 level. The market is very close to the bottom of the overall consolidation that we have been in for a while, so it does make sense that we may attempt to rally. However, if we were to break down below the $35,000 level, it is likely that we could break down rather significantly. Because of this, the market would almost certainly go looking to reach the $30,000 level, which is the next large, round, psychologically significant figure.

If we were to break down below there, then we will almost certainly see Bitcoin end up in freefall. The market needs to see signs of strength rather soon, or we could see a major turn in the overall attitude. Keep in mind that Bitcoin needs to be paid close attention to, as the entirety of the crypto world is influenced by what happens here. As there is a severe lack of risk appetite, I fully suspect that Bitcoin could break down and enter the markets into what is known as a “crypto winter.” The size of the candlestick from Thursday certainly suggests that we are going to continue going lower. However, a bounce might simply be necessary just to build up more downward pressure.

As things stand right now, you are better off trading with a small position and then adding as the market works out in your favor.

The Bitcoin market fell a bit on Friday to show signs of negativity. While we have not broken down below the hammer from the Monday session, we are approaching doing that. If we break down below the Monday hammer, then it is likely that we will go looking to reach the $37,500 level. Breaking below that level could open up the possibility of a challenge to the $35,000 level underneath, which has been rather significant support. For Bitcoin to come even remotely close to saving itself, it must stay above the $35,000 level.

Bitcoin failed at the 50-day EMA over the last couple of days, and it now looks as if we are struggling for footing. The US dollar continues to strengthen, so it does make sense that the BTC/USD pair would fall as the US dollar is half of the equation. The size of the candlestick is somewhat telling because it is bigger than many of the previous ones, but it is not necessarily a brutal candlestick. In other words, there is still a significant chance that the market hangs on in this general vicinity.

As far as buying is concerned, at the very least you would need to see the shooting star taken out to the upside from the Thursday session. That would not only clear a long wick to the upside, but it would also have the market break above the 50-day EMA. In that scenario, it suggests that the market is more than likely going to continue to go higher. The $45,000 level is an area where we have seen a lot of resistance, but it would make a nice target given enough time.

In general, Bitcoin has simply been consolidating for quite some time, but it is also worth noting that as things stand right now, it is a market that continues to see buyers come in at higher levels than the previous time. However, we have not necessarily seen any type of bullish sign, just that we have not broken down. I suspect that Bitcoin is about to make a bigger move, and it should become much clearer rather soon. As things stand right now, you are better off trading with a small position and then adding as the market works out in your favor.