Select the account you'd like to open


Chart Signals: Counterattacks, Selling Climaxes, Bear Traps, Bullish Key Reversals

Chart Signals: Counterattacks, Selling Climaxes, Bear Traps, Bullish Key Reversals

The words above are scattered all through the comments below, the common theme is that markets staged a big bullish reversal after a big plunge that looks like a big capitulation. This could be the first stage in a bullish turnaround but although they finally look exhausted, the bears may not give up so easily, so we could still see significant volatility and trading opportunities as markets try to bottom out.

Asia Pacific Indices

Australia 200 successfully retested its recent low near 4,760 confirming support there and has rallied back up toward 4,890 with support rising toward 4,850. Higher lows in the RSI indicate downward pressure easing. Next potential resistance near 4,955 then 5,000 in a rebound situation.

Japan 225 appears to be on the rebound, having dipped briefly below the 16,000 round number and then driving back up toward 16,400 in a classic bear trap washout. Support has moved up toward 16,300 but the index needs to clear 16,500 to confirm an upturn. RSI oversold suggests potential for a bounce.

Hong Kong 50 has broken down through 19,000 to signal the start of a new downleg, trading down into the 18,500 to 18,800 area. RSI is still really oversold and with other markets turning back upward, a bounce appears possible with next resistance near 19,300.

India 50 is getting oversold and has bounced back up toward 7,330 from 7,230 support but it needs to retake 7,400 to confirm the start of a new upturn.

North American and European Indices

US 30 has had a roller coaster day diving from near 16,000 losing over 500 points before finding support near 15,450, holding above the 2015 low near 15.310. The index then clawed back most of its losses, driving back up toward 15,900 in a big counterattack. Support climbing toward 15,750 from 15,600. RSI oversold but it needs to retake 16,030 to call off the recent free fall.

US NDAQ 100 broke then regained 4,080 a Fibonacci level in what looks like a classic bear trap reversal that bottomed in a successful test of the 4,000 round number. The index has advanced on 4,170 with net potential resistance near 4,195 then 4,225.

US SPX 500 briefly broke its 2015 low near 1,818, apparently flushing out some stops and weak hands before staging a nice rebound up off of 1,810 toward 1,880 with support rising toward 1,856. Even after a possible selling climax, RSI remains oversold so upward correction could continue.

Germany 30 briefly dipped below its 2015 low near 9,320 and then staged a big rally up off of 9,255 back up toward 9,500 to complete a bullish key reversal day that has likely brought the recent selloff to an end. Support rises from 9,400 toward 9,440 with next resistance near 9,520 then 9,700.

UK 100 broke its 2015 low near 5,765 and dove down toward 5,600 before bouncing all the way back. RSI did not confirm the breakdown, and a positive divergence suggests downward momentum starting to slow but it still needs to retake 5,765 to call off the current downtrend with next resistance near 5,855 if successful.


Gold was strong for most of the day, higher, rallying up off of $1,086 support through $1,100 on its way toward $1,110 before it ran into resistance and then dropped back toward $1,100 late in the day as stocks rebounded. Rising RSI confirms growing upward momentum.

Crude Oil WTI spent most of the day in the tank down nearly 8% at one point. It managed to find support near $26.60 and bounced back up toward $28.00 in a late day surge that may have been short covering. Signals mixed as the bounce fell short of its $28.30 recent breakdown point for now confirming the current downtrend remains intact but support rising toward $27.50 suggesting renewed interest. RSI really oversold so volatility may remain high as bears battle with bargain hunters.


US Dollar Index is holding steady near 99.00 below 100.00 resistance and in a 98.00 to 99.60 channel. RSI sitting on 50 confirms sideways momentum.

EURUSD has dropped back from near $1.0970 toward the middle of its $1.0800 to $1.1000 trading channel with RSI sitting on 50 confirming the current sideways consolidation phase.

NZDUSD is on the rebound, regaining the $0.6400 level after dipping down toward $0.6340. Currently trading near $0.6435 with next potential resistance in the $0.6490 to $0.6520 area. RSI touching oversold suggests potential for a trading bounce.

AUDUSD continues to stabilize between $0.6800 and $0.7000 climbing up from $0.6850 toward $0.6920 with $0.6900 becoming higher support. RSI suggests downward pressure levelling off.

USDCNH continues to stabilize near 6.6090 a 23% Fibonacci retracement of the August to January advance. RSI stabilizing near 50 indicates overbought conditions have eased but underlying uptrend remains intact. Currently trading between 6.5825 and 6.6225.

USDJPY dove down to test its August low near 116.15 which held and the pair has been rebounding, climbing back up toward the 116.80 to 117.00 area. RSI regaining 30 from oversold signals an upward correction may be starting as downward pressure fades with next resistance possible near 118.15.

EURJPY continues to stabilize above its 2015 low near 126.20, trading between 126.70- and 127.50. RSI rising up off 30 indicates downward pressure easing. Next resistance possible near 128.75.

CADJPY dove down toward 79.00 before rallying back up above 80.00 and on toward 80.80 in a classic bear trap washout. RSI remains deeply oversold indicating potential for a bigger bounce. Next resistance possible near 92.00.

USDSGD continues to struggle with $1.4400 resistance while RSI slips back toward 50 indicating upward momentum adding. Initial support possible near $1.4355 then $1.4300.

USDCAD staged a big bearish key reversal day, breaking through $1.4600 and rallying toward $1.4700 before turning south and diving back down under $1.4500 with next potential support near $1.4440 then $1.4350. A massive double top in the RSI and extremely overbought conditions indicate potential for a significant downward correction.

CADUSD has a big bullish key reversal underway after diving down to $0.6800 then rallying up into the $0.6890 to $0.6910 area with next potential resistance at the $0.7000 round number. An extremely oversold RSI and a big double bottom indicate potential for a significant rebound.

Sign up for market update emails