Author: Willis Bennett

Interesting Trade Week

Weekly Continuous

Prices almost formed a classic DOJI pattern in during the week– that is a pattern from the Candlestick analysis and I have talked about it occasionally here. The pattern is based upon the Japanese technical analysis that discusses the traders open at a price and then extend either higher or lower during the week only to give up the gains or declines by the end of the week to finish where the market started the week. The analysis is based upon the a military exercise where the gains in the beginning of an offensive are achieved but by the end of the period– all gains are given back.

Last week almost formed a good DOJI pattern but the price action did not go back up and close at the price level where prices opened the week. While close — it cannot qualify as a true DOJI week — so what does it mean one way or another — more importantly — what does it mean for the upcoming period?

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High Volume Week and Little Change

Daily Continuous

January spiked lower and did so with more than a million contracts changing hands last week. The last time that so many contracts traded (1,003,611) was 03/10/20 (1,039,442), before that 1,602,673 on 11/14/18 (the highest volume ever traded in a day). The only other three day period when so many contracts traded was during March ’20.

Extraordinary volume days…they are obviously pretty rare, are often indications of capitulation by one side or the other when the market has been moving steadily higher or lower. Needless to say, last week’s volume achieving a lower low before rebounding back to where prices started the week (more on that in the Weekly section). It’ll be fun and interesting this week.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $2.45-$2.47, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

A Glich

Daily Continuous

The chart above is from yesterday as I have lost my software to bring you the latest chart data. The market did close a little higher yesterday, not challenging the gap from Monday. Trade should be patient here until the price action defines itself.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $2.45-$2.47, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

Bear Market — Over Sold Conditions Continue

Daily Continuous

Not much to add — the RSI on the Daily and January charts are in the extreme over sold zones, the Bollinger study on the Weekly is testing 2 standard deviations under the 20 Week SMA, the Weekly RSI is starting to hit extreme levels — this is not a place where I am going initiate new short positions.

Major Support:, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $2.45-$2.47, $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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False Break Down ?

Daily Continuous

Not actually sure how to interpret yesterday’s action– prices open and gap lower only to have the declines extended during the early opening trade. This was followed by a continuous bullish bias during the day to finish just below the Sunday opening trade. Below the key area at $2.45-$2.47, I can’t call it a legitimate break down in prices due to the price action during the trade day. The follow through over the next couple of days will define a breakdown or fake.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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A Bear Bias Shift?

Daily Continuous

Go into the reason for the $2.45-$2.47 being a critical area for the near term bias of prices in the Weekly section. I do find it interesting that this is the area the late Sunday night traded to.— Shocking. Spend the time to read the Weekly (less than 3 minutes). Other than that — lets see if we get a near term bias shift.

Major Support: $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

Catch a Falling Knife??

Weekly Continuous

While still suffering from whatever little kids spread amongst themselves, I hope you bear with this week’s Weekly analysis.

Last week in the Daily editions I mentioned several times about the potential of a short covering. Unfortunately, that did not happen at least not yet. Rather than a short covering rally failure to overcome the declining resistance triggered a high volume extension of the down trend through the November low ($2.669) for the seventh straight year (and 9 of the last 10 the November low has been violated during December) and support expected to be presented by the 200 – day SMA but did not happen. With still higher volume the highest volume day since the October high (678, 722 v 682,359 contracts, and before that the August high 805,853) January plunged to begin a test of substantial conventional support presented by the July/August/September lows, $2.463, $2.425, and $2.500, respectively. Check the Weekly chart below:

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Growling Bear Continues

Daily Continuous

If you are good at catching falling knives– get the gloves on. Extensions downward –putting prices below the extreme over sold levels on the RSI chart above,suggest that the closer the price gets to $2.48-$2.46 may be a good area to try and catch one with the stop at $2.45. Got no clue but that would break the series of high lows and higher highs.

Major Support: $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.38-$2.26, $2.17
Major Resistance $2.786-$2.865, $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Consolidation Off of Declines

Daily Continuous

Prices took a day off of the declines, now seem to be consolidating the recent losses. Not convinced that the declines will not test the support from the bullish environment (since Apr ’22 — series of higher lows) around $2.47, but am not entering this market with length until it gives me a reason to.

Major Support: $2.82-$2.78, $2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.68, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65

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Jan Spot Extremely Over Sold

Daily Continuous with RSI

Had some questions yesterday when the market gaped lower on the open when it was over sold. Please remember that technical indications are usually based upon mathematics and one of the common indicators we use is the Relative Strength Indicator (RSI). As you will notice in the chart above — the RSI is approaching the lower level of 20 which indicates over sold. This does not mean it can’t go lower but notice on chart — it doesn’t stay there for long. Look at the chart below which is the Spot January chart which is well below 20 and is considered extremely over sold.

Daily Spot January Contract

Even though the technical indicator is under 20 — does not mean that it can’t go lower but how long it stays there is another question. When markets are extended to extreme levels — they are subject reversals that punish the late momentum players.

Am feeling a little better today and will work on the Weekly tomorrow.

Major Support:$2.74, $2.608, $2.47, $2.00, $1.991-$1.96, $1.795-$1.766
Minor Support $2.68, $2.38-$2.26, $2.17
Major Resistance $3.00, $3.16, $3.48, $3.536, 3.59, $3.65