Dow Jones Index Pull Back?

If the top of that rejection candle breaks its high we can see a nice retracement on the Dow. The Index has fallen straight down for two days without a single sizable pullback anywhere in sight. I just caught this setup by glancing at the one hour charts and it looked very appealing. The rejection bar is situated right on the yesterday's low and it looks a lot like stop hunt to me. We also have RSI DIV between the two swings indicating a lack of seller participation. We are also currently sitting on the low that was formed during the early August panic selling crash. The Dow Jones Index is still in a range bound market. Since we are at the bottom of the range it may be wise to fade the support for now until we get a clear break in either direction.

Gold Price at Major Support!

At the close of today's trading session I did my usual routine checks of the major market instruments and this Gold chart made me smile just a little bit. Gold has been in a very clear sideways range since about August. Today price reaches a very significant support zone at $1720. On the chart bellow, I have marked two instances during the month of August where price respected the $1720 area very clearly. So we have a nice location, but not much else. Yes we have a rejection bar with a tail on it, but for my personal taste it leaves much to be desired. I would like to see much larger rejection bar, something that signifies a "stop hunt" and a show of force by the bulls. Today we saw a very muted response to that major support. I would sit on the sideline for now and wait for a much more convincing scenario. I think the $1700 level will be a major battle zone level and a much better area to look for a continuation of the long term trend.

If that 4-hour bar breaks to the upside the first target will be $1765. I have marked it on the chart as the first minor resistance. So keep your eyes open for the next few days, we are at a cross road for the yellow metal. Let the games begin!

Euro Drops to Massive Support Zone

As I am writing this blog post the Euro is sitting on a very key pivot price area. As I have outlined in the market screen shot bellow, the 1.3400 has proven to be a very contested zone. In December of 2010 and through to February of 2011 the 1.34 price area was used a both support and resistance several times. The Euro finally managed to wiggle its way out of that area with a lot of effort. Today for the first time since mid February we are testing the 1.34 and if history is any indicator we might see this zone produce a much needed support for the Euro currency. It is wise to wait for the close of today's trading session before making an educated guess as to what may be in store for this currency pair. Me personally, I am waiting for a rejection bar to form to confirm any buying interest or taking any positions in the market. Remember, patience is a virtue and is rewarded very well in this business. Enjoy!

Tripple Low with Positive Divergence on the S&P Index.

If the top of that bullish engulfing candle breaks we may be in for a possible retracement to the upside. Right now the S&P is sitting at a very nice support zone that held last week on September 12 very nicely. The location of this reversal price action pattern is absolutely perfect. Bullish momentum will be confirmed IF ad only IF the top of that bullish bar breaks to the upside. You all know I absolutely love to see double and triple divergence and this is a great example.

Australian Dollar Bullish Case!

A few days ago I posted a forex video overview of several currencies and the AUD/USD forex pair was one of them. At the time of that video on the daily AUD/USD candle chart we had 2 reversal bars with long tails. Today we have another very interesting bar formation that has just closed. If you note on the chart bellow we have a bullish pin bar that has a very strong positive close. There is a nice tail on the bar indicating a very strong rejection of the monster 1.0200 price pivot zone. If you also take note the Relative Strength Index has posted a very nice positive divergence. If you have ready my blog for any length of time you know I love to see divergence formations because they are an indication of possible trend reversals. Bullish momentum will be confirmed IF we get a break of the high of that reversal rejection candle. Having said all that, there are many supporting factors for a bullish scenario for the Aussie currency. We have a very strong support, nice bar and a very clear RSI signal that a reversal may be imminent. Enjoy!