Markets Switch Risk-On: Indices and Commodities

November 8, 2016

Risk-ON!

An appetite for risk is flowing through markets into the US election as markets such as stock Indices continue to price a Clinton victory as almost a lock.

S&P 500 Daily:
161108_sp500_daily
Click on chart to see a larger view.

You wouldn’t have been able to miss a stock market headline if you’re a financial news junkie on social media and that big, green daily candle is why.

Trying to be a voice of reason however, price is simply still capped by intra-day channel resistance and backed up by that past swing high that we got so excited about when the S&P 500 was breaking out of to record highs.

Caution.

Moving closer to home and taking a look at the SPI 200 indices chart, we see price sitting at an equally important resistance level that we’ve seen price react off in either direction:

SPI 200 Daily:
161108_spi200_weekly
Click on chart to see a larger view.

This chart is nice because of the obvious confluence of resistance as price pulls back to retest the broken intra-day trend line.

Caution x2.

Moving forward and with traders buying indices and the obvious return of a risk appetite, Commodities like Copper, continue to rip.

Heading back to the end of October on that linked blog, Copper caught our eye purely for the higher time frame support level that price had pulled back to test for what was a fourth time:

“Taking a look at the Copper chart, we see that this also coincides with a huge technical support level on the daily:

Time and time again certain explanations are given for the reason certain assets rip, but can you argue with that support level?

No you can’t.

Copper Daily:
161026_copper_daily
Click on chart to see a larger view.

Mark your major levels and trade your major levels.”

Excellent trading to the traders on the Vantage FX book that got on board and rode out the trend.

Copper Daily:
161108_copper_daily
Click on chart to see a larger view.

Learning the personality of a market is a key aspect of developing a trading strategy and the way that Commodities trend like this, often without even the hint of a pullback, is one such personality trait.

Wrapping up on a Tuesday, election volatility is expected to properly begin tonight. Do NOT do anything stupid and keep in mind our implemented election margin requirements.

Best of probabilities to you and remember…

Caution x3!

———

On the Calendar Tuesday:
CNY Trade Balance

GBP Manufacturing Production m/m

USD Presidential Election

Take advantage of opportunity in the market with Australian regulated forex broker, Vantage FX.

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, forex news, research, tools, prices or other information is provided as general market commentary and marketing communication – not as investment advice. Consequently, any person acting on it does so entirely at their own risk. The expert writers express their personal opinions and will not assume any responsibility whatsoever for the Forex account of the reader. We always aim for maximum accuracy and timeliness, and FX broker Vantage FX shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

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