Instead of pickin’ a guitar or banjo, and I do play five instruments like everyone here in Nashville, I’m tryin’ to pick some market directions early using a 3-day chart, in case you want to follow along. I must predict next week’s markets earlier this week (on April 4) due to being out of town April 5 and 6. Let’s see how I do, modifying time frames with next week’s pivots not yet well formed nor fixed in place until Fri. close--I’m pivotless!
The U.S. dollar gained against major pairs thanks to strong economic indicators and the end of month and quarter flows. The greenback had a positive week ahead of the Easter holiday. The first week of April will kick off with a plethora of U.S. economic data, the most important of all the U.S. non-farm payrolls. Central banks will get back into action with the Reserve Bank of Australia (RBA), although no changes to monetary policy are expected in the next meeting.
For beach party breakouts, soybeans, gold, and the British pound have higher narrow-range pivots inside each other for next week and month constituting a pivot breakout mix on multiple time frames- could a strangle/straddle apply? For a milder breakout story, crude has higher inside pivots for next week, and lower inside weekly pivots for next week are in the S&P 500 and inside lower monthly pivots in Bitcoin.
Federal Reserve Chairman Jerome Powell went to Wall Street and was not happy enough to enact whatever rate hikes the Fed had planned for this year, and markets were told to count on three more in 2019. Nobody knows what tomorrow or next month will bring, let alone next year. I came away thinking this guy is trying to pop the stock market bubble.
The S&P 500 lost 5.7% last week in its worst week since January 2016. The market finished Friday’ssession making new lows; trading to 2586 before settling at 2597.75. The 200-day moving average came in at 2584.25 and kept things in check. The dollar has failed and is setting up for the next leg lower fundamentally and technically. If the dollar weakens, commodities priced in dollars strengthen and there are three on our list that we are watching most closely; gold, crude and silver. All three are set to capitalize on a more tumultuous geopolitical environment but each have many of their own reasons.
The U.S. currency is weaker against all major pairs as US tariffs targeting China were announced. The U.S. dollar was trading higher on Wednesday after the U.S. Federal Reserve hiked interest rates by 25 basis points as anticipated. Fed Chair Jerome Powell was neutral on his first press conference but the economic projections painted a strong U.S. economy.
The S&P 500, gold, bitcoin and soybeans do chart bullish to me for next week. In contrast, the yen, euro, pound, Aussie, and crude show some bearish technical conditions for next week-quarter from monthly charts already noted. The short call spread weekly trade ideas in these is derived from bearish candlesticks in multiple time frames, volume and Fisher indicators, and range extension this week. clear. The Aussie, euro, soybeans and British pound show trending pivots for next week, and the yen (two-time frames), gold (two-time frames), Aussie, bitcoin and soybeans have range compression that also can produce wider weekly ranges than average.
Two recent criminal enforcement actions against individual cryptocurrency exchanges, including one offering to do business with a small-level marijuana business in California, indicate that federal agencies are using anti-money laundering laws as a vehicle for oversight over transactions involving cryptocurrency and proceeds from the sale of cannabis.
Here we are at the most important trading week of the entire year. You’ll never hear about this on the business channels, but Gann designated the March change of season as the most pivotal cycle point for markets of the entire year. Longtime readers of this column know I’ve come up with all kinds of names for it through the years.
The U.S. dollar is mixed against major pairs ahead of the March Federal Open Market Committee (FOMC) meeting. The Fed is expected to deliver its fist interest rate lift under Chair Jerome Powell. The Fed will publish its rate statement on Wednesday, March 21 at 2:00 p.m. Eastern. Strong data has fuelled the dollar revival but the drama in the White House and tariff uncertainty are keeping the currency down against safe haven currencies.