Technical Talk: Daily market update (Tuesday, August 23, 2011)

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Adam Hewison, charting strategist of INO.TV, brings you another edition of his invaluable service of daily technical updates on the ups and downs of various markets. This short analysis is a great tool for keeping one’s finger on the pulse and timing the markets. I have personally been using the INO/Market Club software for about two years and can vouch for these tools being extremely useful.

Click the image below to hear Adam’s latest views on gold , silver, the US Dollar Index, the CRB Index, crude oil and the S&P 500 Index. Also, click here to have an instant analysis of any ticker symbol in your portfolio performed by INO.

Here is a summary of his technical outlook:

• SP 500: -90. The major trend is down for the equity markets and today’s strong rally was probably an opportunity to go short. The S&P 500 should run into resistance between 1,164 and 1,175. Both of these levels represent Fibonacci retracement zones at 50% retracement and 61.8% retracement, respectively. We are still viewing this market in a longer term bear trend.

• Silver: +90. The market action in silver leaves a lot to be desired. Yesterday we saw spot silver create a Japanese candlestick “Doji” which is normally a signal for the reversal. Today we’re looking at a potential negative engulfing line, which is another bearish signal. This Japanese candlestick line would be confirmed tomorrow with a lower close in silver. Overall it would appear as though the silver market has topped out for the time being.

• Gold: +90. We would not be surprised to see the gold market trade back down to the $1,816 level or even touch the $1,800 level. The market action today has potentially created a bearish chart with a Japanese candlestick negative engulfing line. This would be confirmed tomorrow, Wednesday, with a lower close. Long term, intermediate and short term traders should hang on for the ride and protect profits with stops.

• Crude Oil: -90. Please be aware that our comments are based on the total contract. The rally has pushed this market back into an area where you should find resistance right around the 85.30 level. This is a 61.8% Fibonacci retracement level. We expect this market to come under pressure on Wednesday or Thursday. Long term and intermediate term traders should hang on for the ride and protect profits with stops. Short-term traders should be on the sidelines in this market. The longer term trend for crude oil is down based on our Trade Triangle technology.

• US Dollar Index: -70. This market has remained in a fairly well defined trading range for the last several months. There is good support for this Index at 73.50. Resistance comes in around the 75 to 76 area. With a Chart Analysis Score of -70 we would want to approach this market using our Donchian Trading Channels and Williams %R indicator. The Index remains below its 200-day moving average, while our longer-term Trade Triangle remains positive.

• CRB Commodity Index: -55. While our bias is towards inflation, the Index is currently indicating that we are in more of a deflationary scenario. We want to remain patient and let our Trade Triangles signal when this market has made a trend change to the upside. Long term and intermediate term traders should hang on for the ride and protect profits with money management stops. Short term traders should be out of the market at the present time.

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Source: INO.TV, August 23, 2011.

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