Higher Prices in Store for Crude Oil?

* See UPDATE below...

The last three-day candle pattern on WTIC Crude Oil could very end up being a "Three White Soldiers" pattern, which is, technically, bullish [Definition (courtesy of StockCharts.com): "Three White Soldiers: A bullish reversal pattern consisting of three consecutive white bodies, each with a higher close. Each should open within the previous body and the close should be near the high of the day."]

"Three White Soldiers" candle pattern

If that's the case, we may see Oil continue to the next major resistance level around $54.00-55.00 (confluence of the 200 MA on the Daily chart and the Mid-Bollinger Band & upper Channel on the Weekly chart) before, either consolidating, or reversing; otherwise, a reversal here could send it down to around $45.00 or $42.50, or lower.

WTIC Crude Oil 9 Months Daily Chart

WTIC Crude Oil 5 Years Daily Chart

Crude Oil Weekly Chart

* UPDATE September 1, 2015:

Well, just like the action in the game, Pac-Man, WTIC Crude Oil just ate the third "White Soldier" and made inroads on the second one in today's wild 8.24% plunge, after it was rejected at the falling 50 MA.

$45.00 is now resistance and $42.50 is the next support level...a drop below that could send price to new lows for this year.

WTIC Crude Oil 9 Months Daily Chart

What's Still "UP" on the Year?

After the market pullback that we've seen, of late, I thought I'd simply post the following Year-to-Date percentage-gained/lost graphs of a variety of world markets, to illustrate (at a glance) which ones are still "up" on the year (as of their close on Wednesday, August 26th)...presented without individual comment.

They can be monitored to see if they strengthen or weaken over the coming days/weeks, as a possible gauge of general sentiment for the remainder of the markets, particularly, those markets that have lost the most ground this year.

U.S. Major Indices

U.S. 9 Major Sectors

Germany, France + PIIGS Countries

Emerging Markets ETF + BRIC Countries + BRIC ETF

Canada, Japan, UK, Australia + World Market Index

Commodities, Homebuilders ETF, U.S. $ + U.S. Bonds

Currencies

Will GOLD and PLATINUM Make a Comeback?

As I'm writing this post (10:00 pm ET August 26th), PLATINUM is currently rallying (+16.60).

My WAG is, if it can hold above 970.30, we could see a substantial rally on it, and take GOLD along for the ride.

PLATINUM/GOLD Daily Comparison Chart

SPX vs SSEC vs USD:JPY

Notice the correlation among these three instruments...namely, SPX (S&P 500 Index) vs SSEC (Shanghai Index) vs USD:JPY (U.S. $ & Japanese Yen Forex pair).

They've pretty much moved in tandem for several years, now...until very recently, when the SSEC plunged to a much greater extent than the other two, and the U.S. $/Yen Forex pair a bit stronger than the SPX.

I'd keep a close eye on the SSEC for any signs of recovery, and, if there's none soon, we may see another (substantial) leg down on that, with, possibly, SPX and USD:JPY following suit. (You can read further details on the SSEC here at this link.)

SPX:VIX Ratio At The Brink

* N.B. See Friday's &  Monday's UPDATES below...

Thursday, August 20th:
Note the aggressive selling on the SPX when the SPX:VIX ratio gets up to the 180 level. A drop and hold below the 100 major support level could spell big trouble for the SPX and the other Major U.S. Indices.

With the Momentum indicator in a downtrend on this timeframe, I wouldn't be surprised to see a larger pullback occur in the equity markets. Watch the 2038 level on the SPX, as mentioned in my post of August 14th, for confirmation.

SPX:VIX Monthly Ratio Chart

As well, we should see a bearish moving average Death Cross form on the World Market Index, possibly as soon as tomorrow's (Friday's) close...see my post of August 19th for more information on this, as this (along with upcoming action in Chinese markets) could very well weigh heavily on U.S. markets.

World Market Index Daily chart

* UPDATE Friday, August 21st:

Failure to hold the 60.00 level on the SPX:VIX ratio chart could cause some panic selling in equities, as I mentioned in last year's post of October 15th, 2014. Price closed just above 70.00 today (Friday), as shown on the following Monthly chart. The Momentum indicator is now sitting at the lowest levels seen in the past 20 years...an ominous sign of things to come.

SPX:VIX Monthly Ratio Chart

As far as the World Market Index is concerned, price fell further today, but I was a day early in the bearish moving average Death Cross formation -- that will likely happen on Monday -- forecasting another "sell" signal for world equity markets.

World Market Index Daily chart

* UPDATE Monday, August 24th:

Here's a look at how World Market Indices closed today...the selloff began overnight in Asia and continued into the rest of world equity markets, where, approximately, $5 Trillion in profits were wiped out.

World Market Indices

Price closed today well below the 60.00 major support level (mentioned above)...and, as you can see from the data above, the percentage world market selloff was considerable, including that of the U.S. equity markets. Look for more of the same, as long as price on this ratio chart remains anywhere below the 110.00 - 60.00 range...the Momentum indicator continued its plunge to even lower 20-year levels, as well, today, to signal more volatility and weakness ahead for the SPX.

SPX:VIX Monthly Ratio Chart

We finally saw a bearish moving average Death Cross form today on the World Market Index, forecasting further weakness and another "sell" signal for world equity markets.

Price has dropped below its first major support level of 1700 and appears to be headed towards the next one at 1600. Whether this continues to plunge without a small bounce in between remains to be seen.

World Market Index Daily chart

I'd also include the following 1-Year Daily chartgrid of Foreign ETFs. The daily ATRs (average trading ranges) are shown in white along the bottom of each chart. Today's extreme spike in range tells me that we are seeing the beginnings of major volatility and weakness entering these ETFs...confirming what the above charts are forecasting.

Foreign ETFs 1-Year Daily charts

Commodity "Bits & Bites" -- GOLD, COPPER & OIL

Here's my quick take on Gold, Copper, and Oil...

GOLD

• a drop and hold below 1072.30 on GOLD could, finally, see price retest the 1000 level, or lower, since there is an absence of volume support down to this level, according to the Volume Profile shown along the far right side of the chart
• 1150 = major resistance

GOLD Weekly

COPPER

• a drop and hold below the current price on COPPER (2.274 and now sitting at the downtrend channel "mean") could send price plunging
• 2.385 = major resistance

COPPER Weekly

OIL

• OIL is now sitting at 2004 prices
• it could drop as low as 33.20 (major support), or lower...no end in sight, since there is little volume support down to this level, according to the Volume Profile shown along the far right side of the chart

OIL Weekly

The Highs and Lows of the SPX

You can see from the Daily chart of the SPX below that the recent long-tailed hammer off the 200 MA failed to confirm the beginning of a new bull market trend.

The roller-coaster sideways movement of the SPX for 2015 will likely persist until, at least, the September Fed meeting, when markets are anticipating the first rate hike. Until then, we may continue to see failure of (sustainable) breakouts in either direction.

If we see a bearish moving average Death Cross form on the World Market Index (as appears imminent soon on the Daily chart below), this would confirm a weakening global economy and would likely drag the U.S. markets down, as well -- possibly, before the September Fed meeting. This is one chart to keep an eye on, as well as China's Shanghai's Index.

SPX: Bull/Bear Line-in-the-Sand Level

Just glancing at this 5-Year Daily chart of the SPX, I'd have to say that 2038 (300 MA) represents major support  as the Bull/Bear line-in-the-sand level...plain and simple.

US $ vs Cdn $: Commodity Price Turnaround Coming?

We may see a turnaround sometime soon on this USD:CDW forex pair.

A break and hold below 50 on the RSI could signal a retest of the 1.250 price level, or lower at the 50 MA at 1.223. The bearish crossovers on the MACD and Stochastics are forecasting lower prices for this forex pair.

If we see a pop in Oil and Gold, we should see the Canadian $ regain some of its losses against the U.S. $. Since somebody bought today's (Tuesday's) intraday dip (big-time) on Canada's TSX to the tune of 150 points from its low of the day, this could be hinting of higher commodity prices. Watch it for clues in the short term; otherwise, today's action may have just been an opportunity to short the Canadian equity and currency markets (and some commodities) at short-lived higher prices.

SPX: No "Free" Market Here

SPX: 2015 has been the most "muted" market (and probably most hated for momentum players) in the past 5 years -- RSI has not hit either 70 or 30 this year -- someone's got this market "muzzled," so no "free" market here.

UPDATE August 12:

Market still locked up tight...thanks to world Central Banks' currency wars...

Lumber vs. Homebuilders: The Great Disconnect

Lumber and the Homebuilders ETF (XHB) traded, essentially, in the same directions from mid-2010 until October 2014 -- when Lumber suddenly took a nosedive down to major support at 240, while XHB broke out and rallied -- as shown on the following 5-Year Daily comparison chart.

At the moment, it looks as though that support level will be retested, once more. A drop and hold below 240 could very well be the catalyst that breaks XHB's slightly-sloping (tight) uptrend. And, a drop and hold below 220 could see a very quick, sizable plunge in XHB...possibly slicing through 34.00 down to retest major support around 28.00, or lower.

Lumber and Homebuilders ETF...two charts to monitor to see if the current spread between them continues to widen or shift.

* UPDATE -- Click this link to view an interesting read, dated September 17th, from Tom McClellan regarding New Home Sales vs Lumber...another correlation to monitor in the coming weeks and months.