On Thursday night, Trump issued attacks on Syria / Assad due to use of chemical weapons.
Interestingly, while both the S&P and Nasdaq made new lows on this Trump news, the Russell did not.
The Russell of course dropped a lot more on April 5, so it has sort of been beaten down more so than the indices. But by not making a new low, it’s forming a slight divergence with the other indices that could be a signal for what happens next.
While the attacks happened, Gold and Silver also went up, but silver’s move was weak to the upside. The 8:30 report on Friday didn’t make a new high in silver while it did for gold. What happened next was silver completely reversed all its gains within a few minutes, much earlier than I had expected.
Last time’s prediction was that the S&P might revisit the 2335 support region – it looks like it went down to 2338 and bounced at midnight – only to hit resistance at 2360 and turn back down again when Trump attacked Syria and markets repeated the same quick drop down to 2337/2338 before reversing.
We again hit resistance at the 2360 region. So at the moment, we are range bound between these two regions. Seems S&P may be stuck here for another day or two.
The 1330-1340 region has served as support dozens of times in the last few months – yet 1400 has been resistance for months as well. The set up is there for a move higher, so it depends on whether the Russell chooses to follow through or morph into something else.
The Nasdaq has been consolidating in this region – leaning towards the upside at the moment.
Silver gave the ultimate whipsaw. I had been wary about why silver hasn’t pushed through 18.3 resistance when it really should have done so, but since 18.15 support kept holding, I figured there should still be a chance for a break over 18.3 — which did happen when Trump attacked Syria – except the move was somewhat muted.
While gold had a decent move to the upside on that news, silver just mad a tiny new high.
Then when the 8:30am report came out – another catalyst in favor of silver, it could not break to a higher high – instead it made a lower low. I was expecting at least a higher high, but it turns out the market had other intentions. Certainly did not expect the quick drop – if anything expected that to happen next week, not within a few hours of the Trump and 8:30 am report catalysts.
At this point, former support becomes resistance – so we may get a bounce to the 18.15 region that could serve as resistance. If so, then a retest of 17.78 is possible before an uptrend resumes.
Gold had a much healthier move than silver — with the Trump attack making a wave 3 high and the 8:30 report making wave 5 high – then an a-b-c pullback.
The pullback was of course deeper than I expected – so now 1260 acts as resistance. If gold struggles at 1260, I would wait at least til end of week to re-enter gold.
On the other hand, consolidation in the 1253 region could represent a buy opportunity. But best to let it play out which region it wants to test.
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