What a day across the equities, currencies and commodites markets - and what does it mean?!

Today the S&P 500 moved to its 1014 level that we've been blathering on about for a long time now. Along with some amazing movement down in the euro and the yen. I bet some of my readers were really wondering about my comments on these currencies - and my bullish views for the dollar - especially after the whipsaw from the end of last week into early this week that took the euro to 144 and the dollar under its 77.92 level! While I acknowledge that the currencies story isn't written into concrete yet - or at least, the concrete hasn't set and dried yet - we can really be in the early stages of a major move up in the dollar. As for the SPX and other equities markets - I was surprised that the SPX closed under 1014. Here's the deal - normally once a Fibonacci target is met in a pattern setup like this significant .382 retracement, then similar to the way we saw the QQQQ's overshoot their 50% level of 39.82, there's some time spent "resonating" around the level. So we cannot be certain that we don't have more strength Monday and even into Tuesday with the SPX still testing around that 1014 level (and Tony's pivot of 1018, and Andre's number(s) which I'm sure Andre will mention in his weekend upate).

Now folks, IF this level sounds the whistle for a B wave top and the markets move into a C wave down, then the movement can be sharp. Take a look at the yen - after it moved to the .618 retrace at about 108 $XJY, it made a definite move down in what looked increasingly like a first wave down. Then after an effort to consolidate (looking like a relatively weak second wave), it moved into the third wave of either a larger wave 3 or of a wave C down. If this is the model for what happens with equities markets, then they may not dilly dally around these levels for very long. Obviously the SPX would still have some time for chopping down with a first wave down, if that's what happens ... and just as obviously, we'd have to see the start of it with a trigger bar on the daily chart. Clearly not something that can happen until next week.

If you were daytrading then you're flat or getting flat from the day. If you were swing trading and not wanting weekend risk you might have been doing TMAR (take money and run) from the reach to either the 1014 Fibonacci or Tony's 1018 pivot, and enjoy the weekend and see what looks like the next swing trade movement starting next week ... either a continuation move further up (how likely is that?!!) or testing for a reversal whether pullback or more bearish.

I'm thinking the most interesting wild card will be gold. Convention wisdom says if the dollar goes up from here then gold must come down. Well, that makes some sense, and I'm tilting that way anyway because of my Elliott Wave and Fibonacci views of gold, as my readers know. There is another theory that readers should know about - that if currencies de-stabilize, then gold will gain "currency" (ha ha) as a safe haven and its price will firm up. Well, maybe gold's price didn't look so bad when priced in euro or yen today! Anyway you get my point, that if there's enough fear about what's happening with currencies then theoretically dollar and gold could both go up. I dunno, I'll be in "show me" mode for that.

Something gold shares with oil is that some are beginning to think there's a triangle taking shape in their daily charts. I'm not convinced, unless it is a "B" wave triangle ... the main thing to know is, we trade it in whichever direction it "leaves" the triangle. If it breaks out and up from it, okay then be long. But if not, and down, then be short or step aside.

What about that VIX? Well it has been doing a higher low and so I am reading it as a bearish indicator. Readers should remember I predicted this would happen on equities getting to a higher but significant Elliott Wave / Fibonacci level if that level would be "it". Doesn't constitute a guarantee all by itself, but it's one of the items to mark into the "bearish" column right now.

Later this weekend we'll look at sentiment and technical data, including what the McClellan Oscillator and other indicators are telling us. The Dow Transports finally jumped above their January high, so we can mark that into the "bullish" column, but doesn't mean a pullback (or more) is ruled out of course. For that matter, it's an interesting thing that the Transports, like the Nasdaq, still did not go under their 2002/2003 low. If you believe that the total bear market is not over, then you'll agree that it's really a matter of time until that happens. Conversely if you believe that the markets are going up into a larger higher "B" wave up, or even a fantastic beautiful fifth wave to new all-time highs, then it doesn't matter ... sorry, I'm not in that camp, but we'll obviously examine those if 1014 doesn't put a stake into the heart of the SPX' rally.

The banking sector (BKX) made another new high on this rally but as I checked the charts and posted earlier including updates, the BKX has chart resistance at $46.52 and $46.68 so I cannot guarantee they continue marching higher - sorry, just cannot say. There are two Elliott Wave counts that can be valid if the BKX turns down again.

I tweeted that the UNG, as bad as it looked today with other commodities sectors moving down, does have support at $12.25 and unless it goes under that then it retains upside potential. Technically, we cannot confirm the more bearish scenarios for other commodites either unless and until they move under prior swing lows either. If the dollar does its thing by moving above its last week swing highs, then we can be thinking that commodites do the reverse and head lower.

I can tell it's going to be another fascinating set of weekend discussions on the markets! Meantime, enjoy your Friday evening with your familes and your friends (remember trading isn't your life, it's to support your happy life)!