SPX marches on…
It has been some rebound in risk and stock markets from the lows just five weeks ago in early April. Prices plunged to a trough at 4,835, which was down just over 20% from the record high at 6,147 from mid-February. That size of sell-off is deemed a bear market – and many market watchers believe it hastened President Trump’s rollback of numerous trade announcements, as well as the 90-day pause. The benchmark S&P 500 recent bull move has broken a couple of downward trendlines and gapped higher through the 200-day SMA at 5,750 to kick off this week. The final Fibonacci level (78.6%) of this year’s down move sits at 5,866, plus a swing high just above, both below the record high at 6,147. Support is the major retracement level (61.8%) at 5,646, with the 200-day SMA now at 5,754.
Gold “double top” reversal in play
The yellow metal has lost some its shine as the risk mood has picked up sharply in recent weeks. Trade tensions have obviously cooled while the India-Pakistan ceasefire agreement also saw selling of the safe haven asset. Prices topped out at $3,500 in late April but fell back after that spike higher. Another top was made at $3,437 and sellers have just broken support just above $3,200. This is the area where a neckline can be drawn for a double top reversal pattern. If that plays out, then there’s $237+ of downside in a measured move. That means prices drop below $3,000, a huge psychological level.
USDJPY downtrend restarts
USD/JPY had been in a long-term bear channel since hitting a high at 158.87 in January. Since then, prices moved above the top end of the channel twice, with the 50-day SMA also capping more upside. Recently, the major broke higher through the downward trendline from the January top. This matched the major Fibonacci retracement level (38.2%) of this year’s drop at 147.13. But the risk-on environment has eased over the last couple of sessions, so the pair has moved back below that Fib pivot point and the 50-day SMA.