Updated: May 3, 2020
In this week's analysis, we will touch briefly on 4 markets that we believe will have considerable short-term moves and therefore, present the best trading opportunities. To read last week's Market Analysis then go here. Our GBPUSD video webinar last Sunday on the massive short was one of the most beautiful trades for the month of April.
S&P 500 - Futures, CFD, ETFs;
Dow Jones - Futures, CFD, ETFs;
EURAUD - Forex
GBPUSD - Forex
ES/SPX 60 Minute Chart - Apr 26th
Despite historic unemployment data and the uncertainty caused by the pandemic, the broader markets seem to maintain their short-term strength and recovery mode. The FED is there to keep the Titanic from sinking, hence the unreal strength in every bear attack. Nonetheless, we couldn't care much since we trade what we see in the market and not what we want. The following are our two hypothesis for the last week of the month:
Hypo #1 (bullish): Never test 2750 on any pullbacks and rally towards 2930.
Hypo #2 (bearish): Never rally over 2850, sell-off below 2750, hold below this level and retest 2700/650.
We always trade according to Hypo #1 unless we get invalidated.
YM/US30 60 Minute Chart - Apr 26th
The same analysis goes for the beast, the Dow! When markets rally, Dow rallies the hardest; when markets sell-off, Dow makes sure to leave no one alive. The following are the trading hypothesis in this market:
Hypo #1 (bullish): Never retest or break below 23k, hold p/bs above 23,400 and rally towards 25,200 as first target.
Hypo #2 (bearish): Never break above 24k but instead dip below 23k and thereafter sell-off towards 22,300 (less likely to happen).
EURAUD Weekly Chart - Apr 26
This currency pair has completed Primary Wave A-B-C vs. 1-2-start of 3, and we are currently sitting in the reversal leg which needs to aim at least 1.560 in the coming months. For this week, we are expecting a dip near 1.670 then a reversal back above 1.700 resistance.
Hypo #1: Hold below 1.700 and continue the down-move towards 1.670. Then rally over 1.700 for higher prices in the month of May.
Hypo #2: Never crawl back above 1.700 and continue the down-move directly towards 1.600.
We will be trading in accordance to the Hypo #1.
GBPUSD 60 Minute Chart - Apr 26
Not much talk is needed here. The clearest pattern where targets and invalidation is right in front of our eyes.
Hypo #1 (bearish): Give us a retest of 1.2440 so we can short near the Right Shoulder. Risk remains slightly above 1.250 and target way below 1.22 (see chart).
Hypo #2 (even more bearish): Never break above 1.2420 but instead trade below 1.2300. We start the short here with risk 1.2350 and target area same as Hypo #1.
Hypo #3 (bullish): Hold above 1.230, break above 1.240, rally over our Hypo #1 entry (1.2440) and strongly close above 1.250. This scenario exposes April 14th high at 1.2640.