Tag: chart analysis

Familiar Pattern in the AMD Chart

Posted on by Aibek Burabayev

The Fed’s tightening puts hard pressure on the broad stock market and chip makers are not the exception. The strong labor market statistics and ongoing inflation pressure supports the hawkish mode.

If one thinks that the sell-off might be over, there is a chart below that I spotted a disastrous model for a well-known chip maker Advanced Micro Devices, Inc. (NASDAQ:AMD).

You definitely know this chart pattern I spotted for you. It is a Head & Shoulders reversal model. Last time this notorious chart pattern appeared in my posts was in May on the chart of Ethereum cryptocurrency. I updated it for you below to illustrate the historical sample.

ETH Weekly Updated

Source: TradingView

As soon as the price crossed below the Neckline beneath $2,400, Ethereum collapsed as it had lost a tremendous 66% down in the valley of $884 in June from the post level of $2,564.

This is how this model has played out before and that is what we could expect in the next chart of AMD below.

AMD Weekly

Source: TradingView

The Head & Shoulders pattern (pink) here is more balanced compared to up-sloped model in the Ethereum chart. The Neckline touch points are located almost exactly at the same level of $72, hence it is a flat line. The Head is quite tall above the wide Left Shoulder and the narrow Right Shoulder. The top of a latter offers a strong resistance and the invalidation point. Continue reading "Familiar Pattern in the AMD Chart" →

The Dollar Has Hit The First Target

Posted on by Aibek Burabayev

The king currency has finally hit the first long-term target of $114 that was set in the summer of a distant 2019 when it traded around $96.

That aim wasn’t clear then as the dollar index (DX) looked weak in the chart. The short-term structure was similar to a pullback after a heavy drop.

The majority of readers did not believe the DX would ever raise its head as you can see in the 2019 ballot results below.

Ballot Votes

However, I had found a bullish hint in a very big map, and I warned you “Don't Get Trapped By Recent Dollar Weakness”.

Back in August, you had already been more bullish on the dollar as you voted the most for the target of $121.3 in the earlier post. This confidence is due to the certain position of the Fed, which resolutely fights the inflation, lifting the rate aggressively round by round.

Let me update the visualization of the real interest rate comparison below to see if the dollar still has fuel to keep unstoppable.

DX Monthly vs Real IR

Source: TradingView

The real interest rate differentials are shown on the scale B: blue line for U.S. - Eurozone, orange line for U.S. – U.K. and the red line for U.S. – Japan. Continue reading "The Dollar Has Hit The First Target" →

Crude Oil Closes the Gap

Posted on by Aibek Burabayev

Back in July, I shared with you a chart of Market Distortion where I put together crude oil and platinum futures. I spotted a disruption of a strong correlation pattern between these two instruments that has been lasting for a quarter of a century.

That post drew your attention with strong support and feedback as readers shared their valuable comments. Below is the graph showing the distribution of your opinion on how the divergence would play out.

Ballot Votes

The majority of readers chose the option that implies the equal move in the opposite direction of both instruments to meet somewhere in between - crude oil should drop to $75 and platinum futures should rocket to $1,200. The second largest bet was on the widening gap.

I prepared for you an updated chart below to see what happened after two months.

Oil Futures vs Platinum Futures Monthly

Source: TradingView

None of the bets have hit it right, although your main choice is still the closest. Indeed, the crude oil futures (black line) did its job fully to close the gap as it almost touched the $75 area. The lowest handle hit was $78 so far.

The counterpart, as it often happens in human relationships, did not meet the other part halfway. The platinum (green line) is still weak as it can’t raise its head to the upside.

Should crude oil do the job for both and drop even lower like a rock to catch up with the metal? Or is platinum quietly accumulating power for a rally? Continue reading "Crude Oil Closes the Gap" →

Gold/Silver Ratio Shows S&P 500 Is On The Edge

Posted on by Aibek Burabayev

It’s time to update the S&P 500 index chart as it emerged inch-perfect since the last update in July.

SP500 Weekly Chart

Source: TradingView

To refresh your memory, I kept the main paths untouched and added new crucial highlights.

The idea of the upcoming breakout of the Falling Wedge pattern (blue converging trendlines) was posted right on time on the Blog as it played out instantly. Indeed, the Bullish Divergence of the RSI indicator with the price chart played out as planned supporting the breakup of the pattern’s resistance.

The majority of readers got it right choosing the red path as a primary scenario. The price action has been amazingly accurate in the 61.8% Fibonacci retracement area where the price failed to overcome the barrier and reversed to the downside from the minor top of $4,325 following the red zigzag.

I added the 52-week simple moving average (purple) to show you how strong the double resistance was at the $4,347-$4,349 level.

The next support is located in the valley in June at $3,637. Continue reading "Gold/Silver Ratio Shows S&P 500 Is On The Edge" →

Bears Smashed Silver, Is Gold Next?

Posted on by Aibek Burabayev

Last month I was wondering “Is It A Trap?” for the top precious metals, referring to the short term bounce that we have been observing.

Bears have smashed the silver price badly below the former valley. Hence, I would start the update with its monthly chart below.

Silver Futures Monthly

Source: TradingView

Silver futures topped around the $21 mark the same day the previous update was posted in the middle of August and then it dropped like a rock to the downside.

The price already drills down the largest Volume Profile (orange) support as it entered the $16-$18 range. The peak volume was registered at the $17 level in the monthly chart. Below $16 the support weakens and further down below $14 there is a volume support gap.

I built the black downtrend with a red mid-channel in this big chart above. We could visually distinguish the first drop (large left red down arrow) from 2011 to 2015. The following huge corrective structure emerged during 2015-2021. Now the market could build the second leg down. The mid-channel support is located at $13.5, right below the above mentioned lower volume area.

We can mark the lower supports for the future. The Flash-Crash valley is at $11.6 fortified with the all-in sustaining costs located at $10.9. The valley of the distant 1991 at $3.5 is the next possible support.

Bulls should push the price outside of the downtrend beyond $27 to turn the tables. Continue reading "Bears Smashed Silver, Is Gold Next?" →