From now till the bottom from long-term cycles (around <SP_W1>), the period consists of three parts: 1) DOWN; 2) UP; 3) DOWN. The anticipated decline in the first DOWN part has timely started and expected at least till <SP_W2>. The second UP part is peaking in the month of <SP_M1>.
As noted in weekly and daily updates last week, on Monday S&P finished a 5-wave decline. And then on Tuesday started the corrective retracement finishing wave A on Tuesday, wave B on Wednesday and started wave C that possibly ended on Thursday around our first upside target of 2889-2896 band. Last Friday was the bottom for short-term cycle in VIX and it tested its daily trend level with S&P around 2885. Both reversed (VIX higher and S&P lower) indicating the corrective retracement for S&P during last week with up trending hourly cycle is finished and now probability is high to see further weakness in S&P at least until <SP_D>. Short-term hourly cycles peak around <SP_Day_Hour1>, bottom around <SP_Day_Hour2>, then uptrend till <SP_Day_Hour3> and decline till <SP_Day_Hour4>.
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| VIX COT - 05/14/2019 |
Commitment of traders (COT) report as of 05/14/2019 showed another decrease in net long DXY and net short EURO futures contracts held by large non-commercial traders along with decrease in net open interest in both of these contracts. The trend in COT report shows less favorability for US Dollar as time passes by. However, in last weekly update, we noted:
"So far the gain in EURUSD has been a lack-luster. And EURUSD is about to give a daily sell signal unless price remains above hourly, daily trend level <EURO_HT1>, <EURO_DT1> respectively and continue to uptrend with good momentum. Weekly trend resistance is at <EURO_WT1>. Similarly, DXY Futures are about to give a daily buy signal to be materialized only if it can move above hourly, daily trend level <DXY_HT1>, <DXY_DT1> respectively and continue to uptrend. Support is at <DXY_S1> and weekly trend level <DXY_WT1>.".
The sell signal in EURUSD and buy signal in DXY futures materialized last week with loss and gain respectively in both of these instruments. EURUSD continues on daily sell signal for some more time with hourly and daily trend at <EURO_HT1>, <EURO_DT1>. Similarly, DXY Futures are on daily buy signal with hourly and daily trend at <DXY_HT1>, <DXY_DT1>.
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| DXY Futures COT - 05/14/2019 |