Sunday, October 28, 2018

Week Ahead 43

SP500 closed bellow the support area defined by the June-July lows whereas NQ closed at the April high/May low support. There is a bullish RSI divergence for both indexes on the 4h chart that might result in some bounce back. Price action on Monday will be important. The next strong support zone is around the January-February lows. The textbook view is that price should retest those levels and form a range  there on.

The EU50 touched the October 2016 high. 

The almost engulfing bar on Thursday and the pinbar on Friday could trigger some bottom fishing trades.  

The lower swing high in VIX after a double top supports this scenario. (Also Gold false breakout) VIX breaking bellow 22.00 would give some more comfort for this trade.

US Yields corrected sharply due to flows to bonds.

Gold could not break the Dec 2017 low strong resistance, though it formed a very nice buildup structure. On the other hand such a strong risk-off mood should have triggered the breakout. 

DX bounced back from the 96.50 strong resistance on Friday.

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