S&P 500 Positioning Still Favors Weakness Despite Sharp Rally
THE TAKEAWAY – S&P 500 technical positioning remains broadly bearish despite yesterday’s aggressive push higher, offering hope for recovery to the safe-haven US Dollar.
S&P 500 – Prices soared higher but conspicuously failed to break the series of lower highs defined by a rising trend line set from the October 27 high, with only a daily close above this boundary overturning the bearish tone of overall positioning for a more neutral bias. Resistance is reinforced by the 14.6% Fibonacci extension at 1251.33. Initial support lines up at 1225.71, the 23.6% Fib.
CRUDE OIL – Prices are retesting support-turned-resistance at the bottom of a rising channel set from early October, now at 102.32. A break above this boundary exposes the November 17 high at 103.35. Support lines up at 94.56.
GOLD – Prices are testing resistance at 1746.08, the 14.6% Fibonacci extension, with a break higher exposing the November 8 high at 1802.77. Near-term support lines up at 1711.13, the 23.6% level, a boundary reinforced by a rising trend line underpinning price action since late September.
US DOLLAR – Prices broke rising trend line support to re-test 9823, the former neckline of a Head and Shoulders bottom carved out between mid-October and mid-November. A close below this boundary would materially change the bullish implications of overall positioning toward a more neutral bias. Near-term resistance lines up at 9925, the 23.6% Fibonacci retracement.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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