Looking at this chart, and looking at the history of Jerome Powell, I can almost guarantee that he will probably make things worse, not better. 

• The gold spot market rallied a bit during the trading session on Thursday, to reach above the $1760 level. The market is likely to continue seeing a lot of noise.
• Gold markets are waiting to see what happens on Friday morning, as Jerome Powell has a speech at the Jackson Hole Symposium.
• Traders are trying to figure out whether the Federal Reserve is going to reiterate its hawkish attitude, or if it is going to have to pivot. After all, there is somewhat mixed economic news out there, but at the end of the day, inflation is still a big deal.

The 50-Day EMA sits above and is offering a significant amount of resistance, so I think a lot of traders will be paying attention to that technical indicator. Above there, we have the $1800 level, which is where we had pulled back from previously, with the 200-Day EMA sitting above there. All of that could cause a significant amount of resistance, so do not be surprised at all to see a huge fight if we try to rally.

Traders Waiting for Jerome Powell’s Speech

Underneath, the $1720 level has offered short-term support, and I think a lot of people will be looking at that number with great interest. If we were to break it down below it, it’s possible that we could go down to the $1680 level. Anything below there opens a significant amount of potential selling pressure, and it’s possible that we could drop all the way down to the $1500 level. It’s going to be difficult to trade this market in the short term, because you are going to have to pay close attention to the bond markets and interest rates, or perhaps more specifically put, pay attention to how traders interpret whatever it is Jerome Powell says.

Looking at this chart, and looking at the history of Jerome Powell, I can almost guarantee that he will probably make things worse, not better. Clarity is not exactly his forte, so I anticipate that we have sloppy trading ahead of us. However, I do think that the support area underneath should be rather significant, so it’s going to take a lot to send the market through that floor. Another real possibility is that we are simply going to grind in this overall consolidating pattern.

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If yields around the world start rising, that’s an excellent buying opportunity in this market, and of course vice versa as we have seen this correlation play out for a while.

• The US dollar rallied during the Friday session to show signs of life again against the Japanese yen.
• The longer-term uptrend has been very strong, so it does make quite a bit of sense that we would see this area offer buyers given enough time.
• Overall, the USD/JPY currency pair will continue to pay close attention to the ¥132 level as potential support, but it’s also worth noting that we have been noisy over the last week or so.

When you look at this chart, you can see that we have shown a bit of a pullback as of late, but we had been a little overdone, and that’s part of a normal market. With the Bank of Japan continuing to print unlimited yen, via buying unlimited bonds, that does put a certain amount of downward pressure on the Japanese currency. However, if interest rates around the world are going to continue to fall, that releases some of that pressure on the Japanese, and thereby makes the Japanese yen strengthen.

Watch the Bond Markets

In other words, you need to pay close attention to the bond markets worldwide to get an idea as to how the Japanese yen may perform. If yields are dropping around the world, then it’s possible that we could see the Japanese yen strengthen. However, if we see a spike in rates, then it’s likely that the Japanese yen gets sold off quite drastically. In that scenario, we will probably look towards the 50-day EMA, which is just below the ¥136 level. If we can break above there, then it’s likely that the market then would perhaps try to make a move to the ¥140 level.

It’s almost impossible to trade this market without paying close attention to the 10-year yields worldwide, so I would have the chart open for the United States, Japan, Germany, and the United Kingdom. If yields around the world start rising, that’s an excellent buying opportunity in this market, and of course vice versa as we have seen this correlation play out for a while. I don’t think that will change any time soon, so as long as you keep an eye on all of these markets combined, it should give you a clear roadmap as to where we go next. Expect volatility, but expect that correlation.

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This is a market that I think will remain noisy, but by the end of the week I would not be surprised at all to see it rally further.

• The USD/JPY currency pair pulled back ever so slightly on Monday as the ¥135 level has offered a little bit of resistance.
• We are very much in an uptrend and that has not changed with this candlestick.
• The ¥132 level underneath will continue to be very crucial, and we need to pay close attention to it.

Trend Likely to Continue

If we were to break down below that level, then it opens up the possibility of a move down to the ¥127.50 level. Ultimately, this is a market that I think continues to be very difficult and noisy, but I’d be lying if I told you that I thought this is a market that suddenly going to change its trend. After all, the Bank of Japan continues to have to fight higher interest rates around the world, thereby buying their own bonds in Japan. That makes the Japanese yen worth less, as they are essentially “printing yen.”

If we were to break above the high of both Friday and Monday, then that opens up the possibility of a bigger move. At that point, I would anticipate that the pair could go looking to the ¥137.50 level. That’s an area that has seen a little bit of resistance but breaking above that could open up a potential move to the ¥140 level. In general, this is a market that I think is going to continue to move based on bond markets more than anything else, and of course, the CPI figures that are coming out on Wednesday.

The Federal Reserve will have to take into account what inflation is going on, so the idea of course is that if inflation continues to run hot, that is going to keep them very tight with their monetary policy. The reality is that’s the most likely situation, so you need to keep in mind that we will probably see the US dollar continue to cause quite a bit of pressure to the upside in this currency pair. If we can break above the ¥140 level, that would just kick off more of a “buy-and-hold” scenario. In general, this is a market that I think will remain noisy, but by the end of the week I would not be surprised at all to see it rally further.

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If we are truly going into some type of major recession, oil will continue to get hammered. 

• The West Texas Intermediate Crude Oil market got a little bit of a bounce on Friday as the job number in America came out with over half a million jobs for the month of July.
• The market is speculating that there will be more demand for crude oil than they had thought 24 hours earlier due to the fact that more people are working.
• Whether or not that’s true is a completely different question, but at this point, it looks like the market is willing to buy that story for the moment.

Still in a Downtrend

You should also keep in mind that perhaps short-sellers took profit heading into the weekend, so that is something worth paying attention to as well. The fact that we are still below the $90 level will weigh upon the idea of bullish narratives, so that is also worth watching. Ultimately, this is a market that has been in a downtrend for a while, so it does make a certain amount of sense that we would continue to go lower.

When you look at this chart, is easy to see that the sellers continue to come back into this market, so I think that this short-term rally will probably get sold into. If we break down below the bottom of the candlestick for the session on Friday, it’s likely that we go lower, perhaps reaching the $80 level underneath. The $80 level is an area that will attract a lot of attention, but quite frankly I just don’t see how that means anything other than a short-term bounce.

If we are truly going into some type of major recession, oil will continue to get hammered. When you look at this chart, you can see that we have been in a bit of a downtrending channel, and it appears that we are going to continue that same overall behavior. Ultimately, I have no interest in buying oil anytime soon, due to the fact that it seems as if all commodities are continuing to sell off, and of course, oil is right in the front when it comes to recessionary concerns. Ultimately, it’s worth noting that we are below the 200ay-d EMA, so it does make quite a bit of sense that we would see further negativity.

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In this environment, it’s difficult to risk a lot of money on any one particular asset, let alone something with the volatility profile of Bitcoin.

• The BTC/USD currency pair bounced a bit Wednesday to show signs of life, gaining over 2%.
• That being said, we still face a lot of noise just above, and in particular at the $24,000 level.
• The $24,000 level is an area that has been difficult to get beyond for a while, so it’s not a huge surprise to see that this market has not necessarily taken off to the outside during the day.

Bitcoin Choppy and Following Risk Appetite

The 50-day EMA sits at roughly $21,000 and is rising, so that could be dynamic support on any type of pullback. Bitcoin has had a little bit of a resurgence over the last couple of weeks, but it is choppy to say the least. In fact, it almost looks like we are trying to form some type of basing pattern, so while it is bullish in its intention, that does not necessarily mean that we get some type of big rally. It’s possible that we could be in a major accumulation phase, but it does remain to be seen whether or not that’s going to be the case. After all, Bitcoin is pretty far out on the risk appetite spectrum, and risk appetite is somewhat all over the place currently. In this environment, it’s difficult to risk a lot of money on any one particular asset, let alone something with the volatility profile of Bitcoin.

If we do break down from here, the $20,000 level will be crucial support. Breaking through that could be quite a bit of a blow to the Bitcoin traders out there, perhaps making them scramble and kicking off the next wave lower. It’s not necessarily going to be an easy move or trade to get beyond, but I do think that given enough time this is a market that will have to make a bigger move. If we break it down, then $12,000 could be your target. If we rally from here, the $28,000 level will be the beginning of significant resistance it extends to the $32,000 level.

Breaking above the $32,000 level then allows for a longer-term move, perhaps to the $40,000 level. I don’t see that happening anytime soon, but if it does, all you can do is follow the market because at the end of the day, price is everything.

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I think this is a situation where you are going to fade the rally until we get a huge move to the upside.

• The S&P 500 recovered even further on Friday, as the jobs number came and went.
• We are trying to trade within this downtrend, and of course, it is a down-trending channel.
• The top of the channel coincides nicely with the 50-day EMA, which is just below the 4000 level.
• A lot of this coincides quite nicely with a potential selling opportunity, but we did not get the exhaustion that I was hoping to see.

Breaking down below the bottom of the candlestick on Friday could be the first clue that we are getting ready to fall again, perhaps trying to get back down to the 3800 level. It’s also worth noting that the 3750 level offered a significant amount of support previously, and I think that is a nice target if we break down. If we were to break through there, then it’s likely that the market will go much lower, perhaps continuing to make fresh, new lows. The 3700 level is an area of interest as well, which would be hit along the way.

If we were to break out to the upside, it’s not until we get above the 4000 level that I start to take a rally seriously. If we were to break above there, then the next target is the 4200 level. A break above there then changes the entire trend, as we flip to the outside. At that point, becomes more “buy-and-hold”, but I think this is a dream at this point, despite the fact that it has been so bullish as of late.

Inflation Impact

Wall Street is pretty good at coming up with narratives, and the latest narrative is that perhaps inflation is slowing down, and it’s likely that the Fed could start cutting rates again at the beginning of next year. One thing I’ve noticed over the last 13 years is that eventually the Federal Reserve does what Wall Street tells them to, but we are nowhere near that at the moment. It’s also worth noting that as long as inflation continues to rip higher, we will probably continue to see more downward pressure than anything else. With that being the case, I think this is a situation where you are going to fade the rally until we get a huge move to the upside.

The Dow Jones Industrial Average continues the corrective rise during its recent trading at the intraday levels, very slightly. The index achieved gains in a session characterized by volatility by 1.12%, to gain about 346.87 points, settling at the end of trading at the level of 31,384.69 last Thursday, after its decline during trading on Tuesday by -0.42%. However, the value of the index decreased on Friday by a very slight percentage, as the Dow Jones Industrial Average (DJIA) dropped to achieve losses by 0.15%, equivalent to 46.40 points, to settle at the end of trading at the level of 31,338.16.

Members of the Federal Reserve’s Monetary Policy Committee decided at its meeting last month that a further 50 or 75 basis points hike in the policy rate was “likely appropriate” in July, as it struggles to rein in inflation.

At its June meeting, the Federal Open Market Committee raised the federal funds rate by 75 basis points, its largest increase in nearly 30 years, in response to levels of inflation not seen in nearly four decades. The central bank has raised interest rates in each of the past three meetings, with further hikes likely in the upcoming meetings.

On the other hand, by looking at the technical analysis of the Dow Jones Industrial Average, we find that it has come close to reaching the historical support point, which had reached its peak in the history of last January of the year 2020, at the level of 29,504.85 points, as it reached the lowest correction level for the Dow Jones Index. During the month of June, it reached the level of 29706.45 points, where the best levels of the Dow Jones buy recommendations are at the support prices of 29504.85 points, in addition to the price level of 27495.00 points.

I still believe that we will see the 17 ZAR level tested.

The US dollar has pulled back a bit during the trading session on Thursday as we have seen an oversold condition in this pair. That being said, the market has seen the 16.80 level offer significant resistance, but quite frankly I think it probably had more to do with the idea of the market being overdone. At this point, pulling back to the 16.40 level makes quite a bit of sense, and of course, it also makes a certain amount of sense that we have seen this market pullback as we are going to have to deal with the jobs number coming out on Friday.

That being said, the longer-term attitude should remain, due to the fact that the interest rates in America are rising, and quite frankly there are a lot of concerns out there when it comes to the global growth situation. The market will continue to see a lot of volatility, as it is an emerging market currency, and of course there are a lot of concerns when it comes to not only global growth, but recessionary concerns, monetary tightening, and much more.

Furthermore, Africa’s not exactly the first place money goes flowing to when you think of the possibility of economic expansion when there are a lot of concerns. In other words, there has to be a huge “risk on attitude” around the world. The 16.40 level is an area that previously had been resistive, so therefore I think it makes quite a bit of sense that we would see that area offers support based upon “market memory.” Breaking down below there then opens up the possibility of a move down to the 16.20 level. Ultimately, I think this is a situation where we are looking to buy the dip and may have to do so after the jobs number, but ultimately this is a market that has much further to go. I still believe that we will see the 17 ZAR level tested, and perhaps even broken above if we continue to see such an ugly outlook for the global economy. Furthermore, it’s worth noting that the South African economy is highly levered to hard commodities such as diamonds, gold, etc. Because of this, we need to see metals take off to the upside to help as well.

You should have plenty of time to accumulate if you are a longer-term investor.

Ethereum rallied just a bit Monday to show signs of life. Breaking above the $1100 level is positive, but one has to wonder whether or not any institutional money was involved, as the Americans were celebrating Independence Day. Because of this, Tuesday may tell the real story, so pay close attention to how the daily candlestick closes.

If we were to break above the $1250 level, that would be very bullish and more likely take this market much higher. In that scenario, I would anticipate an attempt to get back to the $1600 level, perhaps even the $1750 level after that. Anything above there would be a huge bonus, but I just don’t see that happening anytime soon. In fact, I think that once we reach the $1750 level, there would be plenty of people willing to jump out of the market in order to either break even or come close to it.

On a breakdown from here, I would be paying close attention to the $1000 level, and perhaps even more importantly the $900 level. $900 was the recent low, and breaking down below that would more likely than not send even more sellers into the market. In that scenario, the market almost certainly will go down to the $500 level, maybe even $400. It is worth noting that $400 being tested would make a “complete round-trip” of the rally that we have just seen. That is not uncommon for crypto markets, and in the environment we find ourselves in, I do not think there are a lot of people out there willing to throw a ton of money into this market.

That being said, if we get close to the $400 level I will start “stacking”, because the next run higher in crypto should produce even higher highs. In fact, I am actually hoping for this to happen so that I can pick up Ethereum “on the cheap.” In the meantime, short-term rallies are probably thought of as selling opportunities at the first sign of exhaustion, which we should see shortly after a surge higher. As long as the Federal Reserve remains tight with its monetary policy, there’s no real argument for this market going higher over the longer term. You should have plenty of time to accumulate if you are a longer-term investor.

Our expectations remain neutral.

Spot natural gas prices (CFDS ON NATURAL GAS) increased in their recent trading at the intraday levels, to achieve slight daily gains until the moment of writing this report, by 1.34%. It settled at the price of $6.440 per million British thermal units, after it declined during trading yesterday and today by – 3.30%.

Nymex natural gas futures led by the August contract failed to hold on to early gains yesterday, amid weak demand ahead of the weekend. August Nymex futures settled at $6.498/MMBtu, down 7.2 cents on the day, while September futures were down 6.4 cents at $6.493.

Spot gas prices NGI’s Spot Gas National Avg posted moderate gains amid rising temperatures especially on the US East Coast, rising 13.0 cents to $6,610.

The market focused on stocks throughout the spring and summer after the cold winter drained stocks. As Russia’s war on Ukraine has led to stronger calls for US LNG, an explosion at Freeport LNG earlier this month appears to be alleviating supply concerns, although the 2 billion cubic feet per day (bcfd) that would feed the shutdown terminal Usually now available to meet demand or injected into storage.

Last week, the market got its first glimpse of the impact of the Freeport outage on supply in the US. In a surprise report, the Energy Information Administration (EIA) said inventories for the week ending June 17 rose by 74 billion cubic feet.

Technically, the early rise in spot natural gas prices comes as a result of its dependence on the pivotal support level 6.361, which gained it some positive momentum. This is especially with the start of the influx of positive signals on the relative strength indicators. This in light of the dominance of the main bullish trend in the medium term along a trend line, as shown in the graph. The facility is for a period of time (daily), but it continues to suffer from the continuation of negative pressure for its trading below the simple moving average for the previous 50 days. It is also under the control of a bearish corrective wave in the short term.

Therefore, our expectations remain neutral, waiting for the stock’s behavior towards the pivotal support level 6.361. In the event of this level consolidation, it will push the price upwards to target the resistance level 7.368. However, if the price breaks this support, it will increase the negative pressure on its upcoming trades, to directly target the support level 5.660.