Silver
The silver market had a very tough week as the US dollar strengthened during most of it, but we also have to keep in mind that recently silver had seen its implosion wipe out a ton of retail accounts.
That being said, this is a market that I think you need to pay close attention to as the $80 level is a significant support level and is in the middle of the overall consolidation.
If we were to break down below the candlestick during the week, it opens up the possibility of silver dropping down to $70 where I also see support.
Quite frankly, this is a market that has been very noisy, and I think that continues to be the case. Position sizing will be crucial.
S&P 500
The S&P markets have fallen pretty significantly during the week as well testing the 5,000 dollars level. The 5,000 dollars level is a large round psychologically significant figure and an area that I think a lot of people will be paying close attention to.
If we were to break down below the $5,000 level, then it opens up the possibility of a move to the $4,800 level followed very quickly by the $4,600 level.
Longer term, this is a market that I think continues to see the $5,000 level as a bit of a magnet for price.
If that is going to remain the case, then I think we're going to continue to see a lot of sideways action, but I still favor the upside longer term.
USD/CAD
The US dollar initially rallied against the Canadian dollar to test the 1.3750 level only to roll over and show signs of weakness. The 1.35 level underneath is a significant support level that a lot of people will be watching.
It is probably worth noting that the Canadian dollar is getting a little bit of strength due to the idea that oil is spiking. Whether or not that continues remains to be seen, but if it does not, expect a turnaround.
As it stands right now, we're still in the same consolidation area that we return to time and time again.
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USD/MXN
The US dollar screamed higher against the Mexican peso for the week, but quite frankly we've needed to see some type of pullback. The question now is whether or not the 18 pesos level will offer resistance enough to turn things around.
If it does, then it might end up being a nice shorting opportunity. If we get a daily close above the 18 pesos level, then we may be witnessing the end of the recent trend.
All things being equal, this is a market that I think you're looking for signs of exhaustion to fade as the interest rate differential continues to favor Mexico in general.
Bitcoin
The Bitcoin market has been noisy during the week, but we did pierce the $72,000 level. This was impressive considering just how negative most headlines are around the world right now and I will be watching this market very closely.
If we can close above the weekly high and move to the upside, I think at that point Bitcoin could really start to take off. There are questions about what Bitcoin actually is at this point, but what it is almost undoubtedly is extraordinarily oversold.
The question at this point is whether or not the buyers will return. If we were to break down below the $60,000 level, I would anticipate a complete collapse.
Nasdaq 100
The Nasdaq 100 has been very noisy but resilient. That is the pattern I continue to see time and time again in the US stock market despite the fact that it has had every reason to fall apart. That in and of itself probably tells you something.
What I think it tells you is that given enough time, the US stock market, and in this case the Nasdaq 100, will find buyers on any pullback and selling just does not seem to be working out.
EUR/USD
The Euro has fallen apart during the week, and I think a lot of this comes down to the idea that energy is going to become much more expensive in the European Union and with that being the case, it is going to have a major influence on what the European Central Bank can do.
Pay close attention to the 1.15 level. If we were to break down below there then I think the Euro falls apart.
As things stand right now, we are still very much in the same consolidation area that we have been in for a while. I do not look for much here, but I will be watching 1.15.
USD/JPY
The US dollar continues to threaten a major breakout against the Japanese yen although it did not accomplish that with the ¥158 level being the beginning of significant resistance all the way to the ¥160 level.
If we can break there then the market is likely to go much higher. Short-term pullbacks I think open up the possibility of buying opportunities based on cheap dollars.
I do think eventually we break out to the upside, but I also think we have a situation where it is going to be difficult to short this market and it is going to be difficult to buy it right here at this resistance barrier. Look for value and take advantage.
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