Currencies

There is no doubt that pivots work on the currencies, but this year has been relatively stuck in range with a few fake-outs. DXY D chart below, and you'll see the YR1 and YR2 was basically the range from May to November with the exception of just a few days that came back; and then when it finally broke out of that the high was bang on a 2HR1 level.

But this year it moved above all pivots in January but didn't reach any resistance; fell under the FebP and that was the only real move of the year, did break YP to be below all pivots but didn't reach any support level; then came back; above all pivots again, then another fail! What to do here? Not sure. Another very good technical strategist, AC Parets of All Star Charts, likes to avoid asset classes with a flat 200 daily moving average and maybe that is the lesson here. 

Or, with really 3 failed moves in DXY this quarter you could just say enough chop and not take any signal until next quarter. 

EURUSD close to being under all pivots again. It has had this status several times this year without a real drop. 

USDJPY was the best currency move this year with clear rejection of all pivots 2/2-3 and down to a low bang on 1HS2 which was also very near YS2 level.

AUDUSD is doing something interesting too, rallying from its MarP at the start of the month, above Q1P on 3/2 then above 1HP on 3/3 and now testing its YP! AUDUSD has been completely below its YP on a weekly close basis from May 2013! This would be a massive status change to clear that level. This move maybe helped by the gold rally. 

BTCUSD held YP as the low of the year several times, and the high of the year very near FebR1. Now back above 3 levels, and below only the monthly. 

DXY EURUSD and BTCUSD

Currency ideas all hanging by thread. 

DXY cleared all pivots but faded back to QP / MarP combo at 97.66 and 97.67. Clear hold of 1HP right now, but if below the QP today (?) then it is under 2 pivots and no longer much edge. Of course, clear lift above the QP would remedy that situation. EURUSD similar in reverse. Lastly, BTCUSD clearly holding MarP so it is a hold above that level.


Currencies

Weekly report as time permits.

DXY weekly with long term levels only; recovery of YP and HP after 1 week break is bullish and targets 102 area if 96-97 holds. 

And here is the daily chart with all levels; the MarP is basically same the QP 97.67 and 97.66.

EURUSD below all pivots. Note hte small orange dots near yesterday's low is the FebP and not in play anymore. 

USDJPY held 1HS2 on the lows, but stil under YS1 / 1HS1. 

AUD above MarP and testing QP. It has been up here a bunch of times so maybe it will clear. IF so then headnig into 1HP above. 

BTCUSD pivots definitely seem to be in play. 

Currencies

Weekly report if time permits on the major crosses. On all charts, I am showing yearly and half-year pivots (long term) on weekly chart and then daily charts with quarterly and monthly (medium term). 

DXY reclaimed YP & HP, bullish. 

Testing QP here, to watch. Back above would be bullish and possible long (above 3 / 4 pivots, and 4th expires end of month) but rejection puts it back into congestion, no trade. 

Similarly, EURUSD breaking back under YP and HP, bearish if maintains. 

But sitting right on the QP here so no position edge until we see reaction from that. 

USDJPY got smashed from the YP, broke the YS1/ 1HS1 combo, and back to 1HS2 / YS2 area. So major support 110-111.

You can see the QP 1 day recovery and subsequent rejection, back under all pivots as of 2/3. Down to Q1S3 here.

AUDUSD not moving that much, but below YP & HP.

QP rejection in larger downtrend usually good setup as short. 

GBPUSD has been in the news recently. From Pivots it has been clearly weaker since Q4 2015 under YP and HP despite trying a few times to reclaim. 

2/16 would have worked as a short, back under all pivots with clear break of FebP. 

Lastly BTCUSD. I was hoping for real run with lift above major pivots first time above both since 2013!

The high was FebR1, but let's see what happens. 

Weekly strategy update

Judgment based on the close, but for now:

ES needs to hold 1925 its FebP. Anything below that would be first warning sign of trouble.

Also, yesterday I mentioned that it would be better for VIX to confirm strength by dropping under its QP of 19.27. So far that hasn't happened. 

The point on both of these is that a bearish move back under SPY / ES FebPs, along with INDU / VTI would mean cut recent longs and add shorts. List of short possibilities means anything that stayed completely under its FebP without even tagging: QQQ IWM IBB XLF and possibly NKY / EWJ or DAX / EWG.

GLD - I may have erred on the partial take yesterday. To be clear, I pointed out gold in late January and that main portion I think is worth holding, but any adds after the YP clear on 2/3-4 were the judgment call. Above its WP 116.97 would be short term bullish; then if GLD clears its YR1 again then I think worth having a full position. To watch. I haven't talked much about GDX, mostly but not exactly correlated, then I mentioned yesterday that it was doing fine. 

RSX, EWZ, EEM. These are fading a bit today along with the market, oil and $USD strength. EWZ in particular tagged FebR1 and now back under. As I type ACWI is dropping back under its FebP, so a close under that level would help point to taking some gains off the table on these quick squeeze ideas. EEM more tied to China and it hasn't done too much. 

BTCUSD is pulling back from its FebR1. It would be better above, but if markets start to slide again, or trouble in China, then maybe BTCUSD will explode higher. Buy on 2/16 near 407 just cannot become a huge loss so i think worth giving it room.


Weekly strategy update

Some charts on vehicles that I mentioned in the last weekly strategy report. Conclusions are obvious - USA reclaiming FebPs on SPY & DIA which is a mild positive. So my view of a Pivotal Portfolio is shifting a bit more bullish here. But a reclaim of a monthly pivot while being below the others is not the same as position long on an asset above all pivots (the only examples that I track this year have been TLT, GLD, GDX and BTCUSD). 

If you have been following along, there is  a speculative INDU / DIA position from 2/12 that is an easy hold and/or possible add (or SPY), and some smaller combo of the suggested emerging market vehicles RSX, EWZ, and EEM from 2/16 or what is left if you took some quick gains last week.

TLT is not getting hit too hard, but right now GLD looks more like rejection from YR1 area which, if appears this way into the close, I think is a profit taking signal on any add from 2/4-5. In addition, DXY has just held its YP and even reclaiming its 1HP which further pressures GLD.

SPY jumping above the FebP.

GC continuous contract making the rejection look clear (based on first hour, real judgment at the close), and this is really the 2nd time we are seeing selling from this YR1 area. 

Sure enough vehicles that led on the recovery of the FebPs are getting more pop on the bounce. RSX, EWZ and EEM here. Watch FebR1 on EWZ approaching soon.

Lastly BTCUSD had nice pop and already at the FebR1. Let's give this some time. So far pause no rejection despite DXY strength. If people want to get money out of China, a stable BTCUSD is definitely a way. So maybe there is another massive move on this. 

Weekly strategy sum

If you are new to my methods you might want to read the last strategy sum and/or the recent review. 

Last week I was expecting a bounce and that delivered. Per my view of the market and timing model, my bias is for breakdown in March but I have to respect the bullish action on long term levels last week. It is easily possible that indexes go higher and the simplest strategy is to watch the FebPs that are nearest in play on SPX / SPY / ES, INDU / DIA / YM, and NYA / VTI as posted here. I really don't have an opinion on direction for the coming week and will let the FebPs decide. 

If the market shows strength then I might say reduce safe haven trades and add more longs (but only what is above a FebP); but if it shows weakness be ready to pounce by adding shorts or safe haven positions. A breakdown from here could be very fast and messy. 

Based on oil, a breakdown looks more likely. But various VIX indexes are appearing more positive, and it is my experience that VIX if often correct. We'll see what happens. More specifically:

1. In 2016, following The Pivotal Perspective would have reduced then cut (or at least fully hedged) USA stock longs, possibly reversing short, early January 1/4-7, while buying TLT. TLT then added after clearing the YP, and probably took gains on a portion of that at the YR1 / 1HR1 rejection. Basically we are monitoring the TLT position and deciding whether to go back to full strength or continue to hold the portion. If you took USA index shorts, then the YS1 holds, turn alerts 1/20-22 and 2/12 along with the INDU buy were good cover areas. 

2. Likewise, GLD was mentioned several times before the big jump, with an add 2/4-5. I think the first buy is definite hold but watch the YR1 area this week on the ETF and futures to decide on taking some profits or not. This move likely corresponds with main stock index decision at the FebPs. Also might be worth keeping DXY in mind here, as DXY is again testing its YP. A second break should help support the GLD idea. 

3. If in the INDU / DIA speculative buy, then obviously we are watching the reaction from the FebPs. If that clears across the board we could add, but if rejection then cut and take the small gain. I don't want to get cute with the counter-trend. Best gains are made long above pivots and short below. If still in the emerging market longs from last week - RSX, EWZ, and EEM all mentioned as possible buys above FebPs - and of course they have to stay above FebPs to remain valid. Again let's not get too cute with counter-trend, as these have poked above a FebP and still below all the others, but I'd give them a bit more time to play out if the DXY breaks its YP again which was testing on Friday. 

4. If in BTCUSD from 2/16 near 407, that is moving well. "Above all pivots" scores again. 

5. If market is strong, then really INDU / DIA / YM appeared to be the leader for a couple days last week, but as of Friday came back to be about even with SPX / SPY / ES so either of those could be adds. Basically I would only buy what is above a FebP. If weak then there are plenty of choices for shorts - anything that hasn't tagged its FebP yet. So NDX / QQQ / NQ, RTY / IWM / TF, IBB, XLF.

6. Oil. On the CL1 contract, oil has been below all pivots since 11/4/2015. The recent lows were bang on 1HS1 on 1/20 and YS1 2/11-12. Something that has been down 75% in the last 2 years is going to be quite squeezy. So, if already in this position from last year then your judgment call. Major support levels were the perfect places to cover. You could also hold a portion until oil recovers a quarterly pivot.

7. If in emerging market shorts as suggested as portfolio hedges from last year - FXI EEM PIN RSX EWZ were all mentioned in November -  probably you would be out at least some of these positions, most of which had huge gains. First, all except EWZ reached an 1HS1 or YS1 or both. Second, EEM, RSX and EWZ have been above their FebPs 3 times as DXY softens. FXI has been the weakest, remaining below all pivots since 11/25/2015 and so the best to hold at this point. PIN recovered its DecP towards the end of the year but again below all pivots from 1/6/16, at which point there were plenty of USA short choices as well, but also could be held as a short compared to the now relatively stronger EEM, RSX and EWZ.

Interesting buy idea

Funny, I haven't looked at Bitcoin in months. Wait - i am not off my rocker. I'm just doing usual scans near the close for anything that has changed pivot status. I don't even look at the currencies every day, let alone BTCUSD. But check this out: 

Above YP which has clearly held as support several times
Recently above 2HP
Recently cleared Q1P on 2/14, along with FebP
Just held FebP as support for 2 days!

So, recent pivot status change to above all pivots! There is not many vehicles that qualify for this designation. Hold above the FebP and Q1P, cut on daily close below. 

To put the recent move in a longer context, look at the weekly chart. The times where BTCUSD has rallied above both the HP and YP have led to spectacular rallies in 2013. In 2014 and 2015 BTCUSD was below the YP, but in 2016 the YP has held and another launch could be underway. If not, it won't cost too much to find out.