There is still no swing entry in SP500, but I feel we are getting close to it. Advance Decline Line and Insider Accumulation did an amazing job predicting all major moves. We want to wait till they speak again and hopefully, we will get divergence. For now, I focus on intraday and short-term trading on managed accounts. Based on cycles we can expect a rally this week. I can’t predict price action, but I have a few scenarios on my mind:

  • getting above Friday’s high on Monday is a short term buy signal
  • formation of Oops pattern on Monday
  • Turn-Around-Tuesday (if the market is down hard on Monday, it usually rallies on Tuesday into Wednesday)

So, let’s look for and take a very short-term buy signal in SP500.

Swiss Franc futures dropped as it was forecasted. I think the decline is not over yet. We can see a small rally followed by the next wave down. The 1.0700 range was strong resistance and there is a big chance it will be tested again. Commercials are still short this market, seasonal tendency is to the downside. However, Insider Accumulation is turning neutral from bearish. With that in mind and a bit more cautious, we want to look for and take sell signals. Besides, Wyckoff distribution is in the process and we still can make money shorting Swiss Franc futures.

SP500, Swiss Franc, Soybean and Bonds analysis for 05 - 09 October, 2020

It has been a long time since my last Soybean forecast. It is time to pay attention to this market. It is setting up for the decline. Commercials are heavily selling, the seasonal tendency is to the downside, and Insider Accumulation is turning bearish. So, if on Monday we get below Friday’s low, that will be a sell signal. However, it seems like it will take more time to form some pattern. We may see a very short-term rally followed by a sell signal formation. Don’t hurry and wait for confirmation. We have a good setup, but timing matters a lot in this business.

I got a few questions about interest rates this week. Well, I don’t understand why people are waiting for some disaster in this market. Commercials are selling 10-year Nonets and buying 30 year Bonds. That means smart money expects that short-term rates are going to go down and long-term rates are going to stay where they are. This is a bullish yield curve development and a normal market. However, it doesn’t mean a huge rally is about to start in Bond market. It will take time. Short-term rally? – Well, possibly if on Monday we get above Friday’s high. But be realistic about your potential targets.

Wishing you a great week!

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