Charts O'Plenty

Fibs doing their jobs!

When markets continue to run unabated and everyone becomes a momentum chaser, Magnelibra loves to stick to the technical guidance that only Fibs can provide. For you novice investors/traders out there, do not be duped by all the gimmickry of Algo and Bot trading gun slingers. There is no holy grail secret, the only tried and true reality is that nothing is certain! Even programs that run full steam are only as good as their ability to generate sufficient alpha above operating costs and a lot of the time, the churn and burn algo crowd is nothing more than noise, racking up generous fees for the exchanges and data providers. We have always believed that the advent of electronic trading ushered in a new era of anonymity and game playing, where by only a few heavily armed and backed players would run the markets up and down at will, just because they could. Just because they had the balance sheet to do so.

Anyway for the realists out there, for the guys trying their best to make educated and risk appropriate trading decisions, well these charts are for you, just don’t input them into the Machine Learning alpha generators, their pattern recognition skills might lead to some positive feed back self serving loop. Anyway, let’s first look at the SP500:

Earlier weakness has seen a decent snap back up to our 50eMA, yet it completely stopped the run dead in its tracks. This market has risen so far, that we can only opine in the very short term that below the 50eMA means the bears may be winning for now, but as you can see from the earlier action, never a shortage of levered balance sheet buyers.

Next up the Euro Currency Futures:

We talked a few weeks ago about our line in the sand at 121-70 highlighted on our chart, it was the Target/Reversal 0.768 Fib and now we are back below…not a good sign for all the dollar bears out there, but the .382 will provide initial support at 120-79.

Next up we have Crude Oil futures:

We like the technical setup here and considering the Energy sector is the star performer thus far this year, let’s just say, caution is here and you might not want to light that cigarette while your pumping your gas…just sayin…A break below the 50eMA at $51.90 or a close below signals to us, further probes south are in the works.

Let’s now move to the Feb Gold chart:

Gold is off some 6.7% from the highs and is about to run into longer term support and target/reversal level of $1810. We would suspect many weaker US Dollar longer term hard money folks will gladly buy there and thus, let’s just see how this reacts should we trade down another $15 or $20.

We have also been hearing a lot of calls for inflation and for US Treasury yields to continue to rise. Well as long time professional US Treasury Arbs if its one thing we have learned, thinking US Yields rise in a linear fashion, or for any extended period of time is fools play. Every decade over the last 40 years has seen higher rates than where the decade has ended. Thinking this decade will be any different, well we have snake oil to sell you. Look at it this way, if QE is your hammer and everything is a Nail, well that everything includes US Treasury Yields. GET THE PICTURE??? Anyway as we noted a few weeks ago the US Govt 10Y had a date with destiny up at 1.18% and well, it came, it saw and it…failed:

Finally, we have Bitcoin, everyone’s new and improved hot topic of the last year! Well let’s just say we never get emotional about trading, we never get emotional about Bitcoin and we certainly have watched it long enough to know that this beast is ***adult swim only***

In fact we love it when we hear aunt’s, uncle’s and everyone else under the sun talk about something they want to get into but know absolutely nothing about. We know that this generally means the extension is near exhaustion and its time to let a few weak hands have it…Hey but don’t get us wrong, we are huge bulls of the technology, huge fans of decentralization (for many reasons) and Bitcoin has been around for over a decade now. The issue we have is more short term in nature and thus, this set up, well, its below our hard deck, that’s all we will say:

Alright that’s it, we will post our settles when today washes out, for now thing about joining the ranks that subscribe and get our thought process when we see things that are relevant, that matter and not just the BS fluff you get everywhere else. Your support is greatly appreciated. We write about the equivalent of one book a year on this site and the volumes we speak should transcend a lot further than these pages. You should be able to implement a lot of this into your game plan not just in trading, but in all walks of your life. We are in this together whether you believe that or not, it doesn’t matter, we are all connected, so stay positive and know your atoms do have an affect on everyone else around you, so STAY CALM and SIGN UP TODAY!

-Magnelibra Econemotions

DISCLAIMER: For educational purposes only. This is not a solicitation to buy or sell commodity futures or options on neither commodity futures. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of, or from the author Michael Agne owner of Magnelibra Capital Advisors. We will never claim that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, we make no warranty, express or implied, or assume any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed. ALL RIGHTS RESERVED 2021