Weekly Technicals on Metals Part B: Zinc, Lead and Tin
Eddie Tofpik | Feb 03, 2021 08:31
I originally wrote back in November and then repeated the last three weeks how I was forced to ‘to draw a shallower Bullish Schiff Pitchfork for the same move (early July—early October 2020 move) and guess what? It fits! The Upper Tine (currently 3029) has held down the top of the market back in late November 2020 and mid December 2020 and the Middle Tine (currently 2831) is holding up the market, more on a closing basis, these past three weeks.
So, whilst superficially the market may be topping and looking Sideways to a potential move lower, the reality is that the Bullish incentive is still alive, though at a less acute angle. It all depends on what the market will do with the big old 50% Fib at 2806, because there’s a lot of support below and also resistance above.’
The market chose to punch lower and by Friday three weeks ago we had closed below both the Middle SP Tine as well as the Short/Medium MA (currently 2757). Last week the market closed below the next important support, the 50% Fib of the June 2018—March 2020 move at 2679, the first of that previously mentioned significant new Band of support that would supposedly hold up the market. It didn’t!
Two weeks ago I wrote about this new Band ‘The support is in depth, it stretches down to Lower Tine (currently 2633) of the Bullish SP and includes High/Low, Fibs, Tines, an Uptrend (currently 2645) and the Medium MA (currently 2636). It has not been tested but I suspect it may be interestingly strong as support. We’ll see I suppose, and soon! In the middle of last week we saw how god that support was. It failed dismally!
Last Wednesday’s action sliced down through it all like a hot knife through butter and carried on down until the next small Congestion below from last October—early November 2020 in the 2542 area. All that previous...failed...support, will now be retired. Meanwhile below we have the next support at the Congestion based around the 50% Fib of the June 1028—March 2020 move at 2490. However, there was one satisfying outcome. Last week I wrote at the end of my commentary ‘We seem very much to have formed a large Rounded Top with elements of a Triple Top within it. The potential for the Triple Top would be where Target ‘X’ is placed on the Daily Chart at about 2578. However, this all depends on the significant support above it giving way and that’s not certain yet.’.
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Well, Target (NYSE:TGT) ‘X’ was achieved on the same Wednesday that all the support was broken. The market hasn’t done much since. I suspect that achieving Target ‘X’ was a big concept to swallow so quickly, leading to the Indecision we’ve seen since getting here.
h2 Lead/h2In many ways, this market is the most interesting of all the ones covered here. I wrote three weeks ago ‘The Bullish May—October 2020 Andrews Pitchfork has been running this market...and continues to run it. However, at the very end of November we had a deviation with a spike up that closed significantly lower. Now this could have been because of the 50% Fib of the big February 2018—March 2020 move at 2127 - and it most probably was - most of it.
However, it got me thinking as to whether there was something else there...and there was. I drew a Bullish Schiff Pitchfork for the same May—October 2020 move and found out that the Upper Tine (currently 2192) had also capped the market. Hence, it seems both of these capped the rise back at the turn into December 2020. Now this 50% Fib at 2127 is not the only one involved here, the 50% Fib for the June 2018—March 2020 move at 2062 has also been involved, as has the January 2020 high at 2039.
These two acted as a new Congestion area after the market started and repeatedly tried to drop down and then last week (four weeks ago now) as a cap on the rise. In late December, the market tried its first real attempt lower. The fall fell into a load of support, mainly starting from the Fib Congestion between 1997—1990 but also including on the downside the Middle Tine of the Bullish SP (currently 2022), the recent 50% Fib at 1944, the two MAs of the Short/Medium (currently 2026) and the Medium (currently 1936) plus the 50% Fib of the October 2019—March 2020 move at 1915. Of these, it seems that at that time the recent 50% Fib at 1944 was the most important if turning things back up. Today (two Tuesday’s ago), we’re seeing the Short/Medium MA holding up the market, acting like a proxy Uptrend it seems. We’ll see!
The Bearish pressure is still there though the Bullish incentive is still strong as neither of the Lower Tines for the Bullish AP (currently 1990) nor the Bullish SP (currently 1852) have been breached, though the one for the Bullish AP is not that far away. That is the current situation but there is something on the horizon that needs attention. On the 27th of January - give or take a day or two - there is a Crossover of Tines, namely the Middle Tine of the Bullish AP crosses the Upper Tine of the Bullish SP for the same move. This is a period to watch as such Crossovers usually have one or more of the following, a change in Trend or a reinforcement of Trend, a significant High or Low, a significant Daily Pattern and finally a large Daily range. This is something to watch out for. It may not be ideal but they tend to happen around such Crossovers.’
That was not quite a complete reprise but enough to be treated as such. All are still seemingly still valid points though I suggest the Medium MA point may be superfluous for the moment. I would only add the following. I also wrote two weeks ago the following ‘It is not perfect but we may be having a potential Sideways Triangle forming from all the toing and froing in recent weeks. Specifically, the late November-to-date Downtrend (currently 2044) and the more recent mid to late December-to-date Uptrend (currently 2002). Both these are two pointers but the Downtrend could be seen as a possible four pointer if finessed. It will be interesting to see what the market makes of all these forces pushing an pulling in different directions.’
The 27th came last week and we did indeed have a major attempt higher with a Key Reversal Up and a close above and outside the good looking Downtrend. However, important as this move and close above were, the very next day we had a combined Immediate Countering Bearish Open & Close Long Black Marubozo and Bearish Engulfing Pattern, just! This was enough to send the market back into the Sideways Triangle. Since then we’ve had Indecision and Sideways action, including a Key Reversal Down that tried to hide as an Indecisive Spinning Top and did nothing much! The key issue now is that the Sideways Triangle ends next week and with narrower and narrower ranges, I’m curious as to which way we may go. One final point, the action on the 27th last week could set the stage for the current Sideways Triangle to morph into an Ascending Triangle. Watch out for that!
h2 Tin/h2I wrote this three weeks ago ‘The late September—late October 2020 Bullish Andrews Pitchfork has, despite being penetrated, still provided an excellent Bullish angle of attack of this market'. These past two weeks have seen a whole new level of action here. Initially, recent action looked like it may be forming a possible Double Top. However, two weeks ago the market broke that with a move up from the late November 2020 Uptrend (currently 21705) up to test the Upper Tine (currently 22835). That initial move up failed but only until last week when the market pierces and broke up through the Upper Tine with consecutive closes over it. I’ve kept it on the Daily Chart just in case in the next week or so the market decides to ride along the topside of the Upper Tine.
The move up last week and this has run up into a Congestion Band stretching from the July 2014 high at 23070 up to the March 2013 high at 24155. There is a crack in between 23555—23855 but that is immaterial if you still look at this whole overhead resistance. The question I had last time was does this market have enough ammunition to take it on? The answer so far has been yes, sort of! We’ve seen a significant move up within the main body of resistance but it has been tempered and I think I may have an answer as to why.
If you were to take the Uptrend as a possible Lower Bull Channel line, then the action across the Tops of this year could be see as a possible Upper Bull Channel Line (currently 23410). I would venture further, we could even have an Ascending Broadening Wedge Pattern. So far, we haven’t touched both side enough to verify either Pattern. However, I will keep an eye on it and so should you. The reason why is that today we seem to be forming a possible Shooting Star Pattern. Now these tend to be Bearish (Type 1) but they can also be Bullish (Type 2) in the right circumstances. I await what will be the result of the follow on to this currently under construction Pattern.
/h2
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