Expecting Bullish Conclusion to this Consolidation
By
Luke Miller
Looking at the U.S indices to start, our support level at around 275 in the SPDR S&P 500 ETF (SPY) held yesterday, which points to bullish-leaning sentiment. This reminds me of the entire run over the last month, where bullish support would hold (even if it was broken and then retaken over several days). Our Bayesian timing system (BTS) leans to a bullish conclusion to this consolidation, with a strong turn higher targeting the low 290's initially.
In Oil, the US Oil ETF (USO) had another corrective retrace from the low 13 area, but the BTS still favors down more than up with targets in the 12.25-12.50 range and down to 11.25-11.50 if that area doesn’t hold. On a micro level, 12.80 support is in the way of lower prices, but should ultimately be taken out. A
Metals have returned to their multi-week trading range for the iShares Silver Trust (SLV) and the SPDR Gold Shares (GDX), with GLD breaking to a new multi-week lows. However, metals maintained their bullish potential with all three metals staying above their lower supports at GDX 21.50, GLD 120.50, and SLV 14.90.
With the potential for a significant run higher, the BTS continues to hold long in this multi-week consolidation pattern. IF this bottom is eventually put in, then our price cluster at GLD 133-135 is the multi-week target.
In natural gas, the United States Natural Gas (UNG) continues to grind higher and really needs three days above 24 to get to 25 or higher. Otherwise, UNG could find itself back in the 23-23.50 range as it awaits higher prices. UNG just trades 3-4% over several-day moves.
In agriculture, the inability to get above 18.55 has pushed Invesco DB Agriculture (DBA) yet lower again. This drop does appear corrective from the 19.50 area with a strong move higher expected this week.
The SPDR S&P Biotech ETF (XBI) has a long signal with targets at 91, then 94, then 96, then 98, back to 96 support but still with 100 in its sights. Consolidating continues, but the longer XBI stays above 94, the higher the probability of breaking 100 – and with a break of a multi-month triple top, 110 would most likely happen very quickly above 100.
Finally, in the Financial Select Sector SPDR ETF (XLF), the churning above 27.25 and near 27.50 continues. On a micro level getting above 27.60 should get XLF back to 28 to make the next decision.
