Major Market Ranges for the Week of Aug. 6: Monthly chart views & crude oil’s roaring range breakout

August 6, 2018 10:17 AM

The week of Aug. 6 presents the start of a massive crude oil price move. It also offers weekly and monthly trending pivots in the Japanese yen, near weekly-chart lows. The Eurodollar has higher monthly pivots overlapping last month’s pivots, forming a range break setup in trending pivot math for the next four weeks and on the monthly camarilla low-reversal pivots. Additional Euro supports include the monthly 20-period and 50-period moving averages.

The euro does, however, have sideways, lower pivots for the coming week, a doji series line on the weekly chart 80-period moving average, so it may not break here/now. 1.148 in a Wave 3 drop or 1.190 bounce retest are my propositions. Gold, in a similar manner, has inside, overlapping pivots (slightly lower) for this coming week, although my swing low assessment from a few weeks ago is still holding as of Aug. 2, 2018. I’m bullish on gold because of multiple candlesticks’ quality and that the monthly chart’s 4-candle cascade move downwards is outside the normal (once in five years has a monthly chart candle color persisted 5 times in a row) expectation. Can August become a green monthly gold candle, rejecting lower pivots this week?

The soybeans are bearish for this coming week but a monthly chart hammer low shows promise of a retracement bounce to $950.00 per bushel before winter (took 6 months to drop, so a Fibonacci 50% time pivot could be 3 months ((1/2 of 6 months)). $878 for the coming week resonates with me, eyeballing the weekly chart nocturnally for closing/opening prices & halfway points as harmonic equilibria.

Crude oil is the current big story about a big price move that hasn’t happened yet. I can’t guarantee which direction the roaring breakout will go. I expect a roaring breakout because the weekly and monthly pivots are in overlapping, inside positioning simultaneously, catching traders of many time frames. The weekly chart has an indecisive doji on the 20-period moving average, and the three-day chart has a bullish hammer with a volume spread analysis bullish test. With the monthly chart candle now bullish on the 200-period moving average, I am seeing some bullishness- maybe to the $76.00/barrel level where a monthly chart Low Volume Node exists- at least before a possible large drop back to $62-$48 per barrel levels.  

Soybeans, bitcoin, crude oil, and the S&P 500 futures have reversal-friendly weekly pivots, but the S&P 500 and crude oil are still in the context of breakout pivot placement on the price axis, thus making reversals a less high probability trade this week. My predictions for this week included the Nasdaq 7,300 target hit and closed Friday afternoon last week at 7,299.75. I continue to contend that a 3-month drop-sideways move in the indices will allow the 30-Year Treasuries that are forming two types of busted patterns in bottoming action (rounded bottom and inverted head and shoulders) to give low-interest rates to the mortgage industry for three months as bond prices temporarily rise.


Tracking of open option spread trade idea

ZN (10-year Treasury Notes) Long- monthly chart 121’000, or 122 options trade into Aug.-Sept.

Nasdaq/30-Year Bonds- 2-week Naz short, bonds long options spreads expiry Aug. 3 or sooner. Close of Naz short a win with target hit, and long bond position still cooking.

Eurodollar Long- monthly chart wave-2 bounce trade into Aug.-Sept. Close soon, watch breakouts.

Gold Long- weekly chart trade into Aug. with monthly options; weekly options long off daily chart into Aug. 3 expiration if closed Tues, a win but losing Thu. evening- Open Long Monthly Issues.

Crude Oil- research straddles/strangles but with sideways pivots monthly and weekly, the fuel for wide-reaching prices may not be there. Off the daily chart bull engulf and 3-day chart hammer, one could place a short put spread long position on weeklies with throwaway money.


Predicted ranges for the week of Aug. 6: Caution: At-or-beyond levels/numbers

S&P 500

High:2838/Low: 2807      

Japanese yen

High:9034/Low: 8950                

Eurodollar

High:1.170/Low: 1.160

Gold

High:$1,231/Low:$1,216

Crude oil

High:$70.05/ Low: $67.83             

Soybeans

High:$9.10/Low: $8.76

Bitcoin (XBT)

High:$7,800/Low: $7,170      


Projected & actual ranges for the week ending Aug. 3 (as of Friday morning)

S&P 500 High:2854/Low, 2808 Actual: 2831-2791

Japanese Yen

High: 9053/Low: 8860, Actual: 9063-8943      

Euro

High:1.173/Low: 1.163, Actual  1.179-1.161

Gold

High: $1,245/Low:$1,225, Actual: $1,237-$1,215

Crude oil

High: $69.95/ Low:$68.56, Actual  $70.43-$66.92

Soybeans

High: $8.99/Low: $8.54, Actual $9.22-$8.85

Bitcoin (XTB)

High: $8,600/Low: $7,150, Actual: $8,270-$7,435

 

Crude oil chart grid

If you look at the charts below, the one of the far right is 3-day chart with a green hammer under the monthly pivots that are inside last month’s pivots, reflecting both a narrow range box and a directional hint at lower prices amidst a breakout- it may not be solely/largely down if pivots are rejected. Second from the right is the weekly chart showing the 500-period moving average rejection as a purple line with a doji there before the down move that I predicted resulting in a doji here on the 20-moving average. The chart next to the far left one is a daily frame with a bullish engulfing candlestick upwardly piercing both this week’s and next week’s pivots -- you can’t tell which pivots are which in the inside narrow range of pivots from narrow range pricing.

The far left shows the monthly chart bullish candle (two days into the month, we know that candle can become anything by Sept.). It is bouncing off the red 200-period moving average aiming at the 80-period moving average with overbought conditions, as evidenced by the Fisher understudy flashing down arrows. So, don’t get caught up in too much short-term bullishness; meanwhile, do not ignore daily and 3-day charts’ bullish candlesticks for the coming week.


Crude oil charts, Source: Think or Swim

 

About the Author

Trevor Smith is a registered commodity trading advisor who holds four degrees across multiple disciplines. His study of financial markets led to his beliefs that investors can be self-directed and that market moves could be predicted using a variety of technical indicators and mathematics. His website is www.trevorsmithfnp.com. @TrevorSmithCTA