FM Wealth Management News Letter
Natural Gas (UNG)
During the past week we saw how natural gas keeps testing the $2.50 resistance area in fact hitting it no less than five times. We have seen double bottoms before, but quintuple bottoms? We believe that this is setting up for an eventual break so we are looking for where this bounce may stall and turn lower.
UNG made a very strong trend sequence lower into the $2.50 resistance
and a very weak correctional bounce creating a “bear flag” to the $2.80
range. $2.8 was only a 23.6% Fibonacci retrace of the previous drop.
This could carry on straight down from here to near $2.20, but after a
30% fall from the January 2017 high it seems a bit oversold and perhaps
more likely to recover once more before the break.
So we wouldn’t be in a hurry to short at today’s price, but could be interested on any bounce back above $2,70, especially if that bounce was as corrective and weak looking as the previous one in February to early March.
Gold (GLD) Silver (SLV)
The Federal Reserve announced another round rate hikes and precious metals responded in their usual manner by rallying. This is something we have written about several times in the FM Wealth Management News Letter and gold (GLD) was set up exactly as it was before the March 2017 hike and the reaction, at least thus far has been exactly the same.
The short-term bump higher changes very little in the bigger picture, as we see here on SLV.
This is does indicate very bullish pattern “an inverse head and shoulders”, even though it is our contention that we are still a long way from triggering that given that we are still around $17.50.
If we zoom in, there are various possible scenarios and we have relied on previous patterns as a guide to plot a probable path forward.
From July to December 2017 we saw comparable moves and this fits into the most likely scenarios to project one move down under $16 and then rally up. Should SLV fall below $15.60 that would invalidate this particular set up and we would have to look for alternatives.
Copper (JJC)
This past week we saw copper make significant but measured move from its 2016 low and the trend is slowing. Though it is definitely not displaying the classic consolidation top we might expect if it was going to roll over. In fact, the pattern over the last six months looks very similar to the six-month pattern we saw in the last large rally following the 2016 elections.
The charts above would suggest copper will simply move sideways before making one last rally. So we are advising not to get too bearish if the channel breaks to the downside as the price will simply chop around and recover again.
We find this view to be supported by the structure of the decline from the $3.33 high. Notice the slow, choppy and correctional look. As long as this remains the case we have to give copper’s uptrend the benefit of the doubt.
Something we noticed and want to point out, the copper pattern over the last 3 months closely resembles that of silver over the last 9 months.
We are not sure this offers us much insight at this moment, but it is interesting how often these patterns repeat in different time frames. Just observing how well we could have traded copper if we had spotted the above earlier (say late January). This is why we at FM Wealth Management are always on the look out for leading/lagging markets and repeating patterns.
Other Commodities
We tend to trade whatever has the cleanest set up and should find any clear charts in the commodity space we will share them in future FM Wealth Management News Letters.
Corn for example is no very clean, and you can’t identify a strong trend or high probability when we use the FM Wealth Management wave analysis model, but the implications of the pattern are fairly straightforward.
Please let us know if there are any other commodities you want us to cover.
The US dollar (UUP) is the last chart we will share with you, because all of the above commodities are of course priced in dollars, it most certainly have relevance, with some commodities such as gold and oil are much more sensitive to currency fluctuations than others.
We get in to too much detail, except to say the upside is limited. The last move up in UUP was correctional and did not set up a trend, and new lower levels will follow in the coming months.
A Note To Reader
In the FM Wealth Management News Letters we try to map out the most likely scenarios in various markets based on out interpretation of probabilities and the application of our wave analysis. We know and we would like to emphasize that it is rare for every scenario to play out exactly we expect, but combined with other analysis and good money management, they can help frame profitable trades.
During the past week we saw how natural gas keeps testing the $2.50 resistance area in fact hitting it no less than five times. We have seen double bottoms before, but quintuple bottoms? We believe that this is setting up for an eventual break so we are looking for where this bounce may stall and turn lower.
So we wouldn’t be in a hurry to short at today’s price, but could be interested on any bounce back above $2,70, especially if that bounce was as corrective and weak looking as the previous one in February to early March.
Gold (GLD) Silver (SLV)
The Federal Reserve announced another round rate hikes and precious metals responded in their usual manner by rallying. This is something we have written about several times in the FM Wealth Management News Letter and gold (GLD) was set up exactly as it was before the March 2017 hike and the reaction, at least thus far has been exactly the same.
The short-term bump higher changes very little in the bigger picture, as we see here on SLV.
This is does indicate very bullish pattern “an inverse head and shoulders”, even though it is our contention that we are still a long way from triggering that given that we are still around $17.50.
If we zoom in, there are various possible scenarios and we have relied on previous patterns as a guide to plot a probable path forward.
From July to December 2017 we saw comparable moves and this fits into the most likely scenarios to project one move down under $16 and then rally up. Should SLV fall below $15.60 that would invalidate this particular set up and we would have to look for alternatives.
Copper (JJC)
This past week we saw copper make significant but measured move from its 2016 low and the trend is slowing. Though it is definitely not displaying the classic consolidation top we might expect if it was going to roll over. In fact, the pattern over the last six months looks very similar to the six-month pattern we saw in the last large rally following the 2016 elections.
The charts above would suggest copper will simply move sideways before making one last rally. So we are advising not to get too bearish if the channel breaks to the downside as the price will simply chop around and recover again.
We find this view to be supported by the structure of the decline from the $3.33 high. Notice the slow, choppy and correctional look. As long as this remains the case we have to give copper’s uptrend the benefit of the doubt.
Something we noticed and want to point out, the copper pattern over the last 3 months closely resembles that of silver over the last 9 months.
We are not sure this offers us much insight at this moment, but it is interesting how often these patterns repeat in different time frames. Just observing how well we could have traded copper if we had spotted the above earlier (say late January). This is why we at FM Wealth Management are always on the look out for leading/lagging markets and repeating patterns.
Other Commodities
We tend to trade whatever has the cleanest set up and should find any clear charts in the commodity space we will share them in future FM Wealth Management News Letters.
Corn for example is no very clean, and you can’t identify a strong trend or high probability when we use the FM Wealth Management wave analysis model, but the implications of the pattern are fairly straightforward.
Please let us know if there are any other commodities you want us to cover.
The US dollar (UUP) is the last chart we will share with you, because all of the above commodities are of course priced in dollars, it most certainly have relevance, with some commodities such as gold and oil are much more sensitive to currency fluctuations than others.
We get in to too much detail, except to say the upside is limited. The last move up in UUP was correctional and did not set up a trend, and new lower levels will follow in the coming months.
A Note To Reader
In the FM Wealth Management News Letters we try to map out the most likely scenarios in various markets based on out interpretation of probabilities and the application of our wave analysis. We know and we would like to emphasize that it is rare for every scenario to play out exactly we expect, but combined with other analysis and good money management, they can help frame profitable trades.
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