Technical Talk: Daily market update (October 3, 2011)

By Prieur du Plessis, on October 4th, 2011 posted in: Investment, Markets, Money One comment so far

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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:

• S&P 500 Index: -100. The 1,120 area continues to provide support for the S&P 500. This is the last vestige of hope for the bulls. If this level were to give way, I think we will see this market move down to our ultimate target zone which is the 1,000 to 950 area. As always, we are going to rely on Trade Triangle technology to guide us on the path to profits. At the moment this Index is trapped in a broad trading range bounded by 1,120 on the downside and 1,220 on the upside. We are looking for this market to break down and be on the defensive for the next several weeks. Intermediate and long-term traders should continue to be short this index.

Suggested S&P 500 trading instruments:
Non Leveraged ETFs: (Long SPY) (Short SH)
2 x Leveraged ETFs: (Long SSO)(Short SDS)

• Silver: -90. Not much has changed in this market, as it continues to be trapped in a fairly narrow trading range. When we see situations like this we tend to want to lean on our Trade Triangle technology to help us decipher the next swing. Presently it would appear the next swing is going to be on the downside, as all of our Trade Triangles are in a negative mode. How low can silver go? I think we have to look back at major support which is around the $20 an ounce level. Silver could drop another 30% from current levels. Having said that, we will rely on Trade Triangle technology to keep us on the right side of the trends. Traders who are following our Trade Triangle Technology should be short this market with appropriate stops.

Suggested Silver trading instruments:
Non Leveraged ETFs: (Long SLV) (Short the ETF SLV)
Leveraged ETFs: (Long AGQ) (Short ZSL)

• Gold: +55. The gold market has now moved two Triangles to the green column, which is a potential sign it may be ready to move back to the upside and retrace some of the losses that were seen in September. A Chart Analysis Score for gold of + 55 indicates a near-term trading range. This range is pretty broad with support coming in at $1,550 on the downside and resistance at $1,675 on the upside. I think most traders would be better off watching from the sidelines, as the volatility continues to contract. Only long term traders should maintain long positions with the appropriate stops in place.

Suggested Gold trading instruments:
Non Leveraged ETFs: (Long GLD) (Short the ETF GLD)
Leveraged ETFs:(Long UGL) (Short GLL)

• Crude Oil: -90. Crude oil started off the day under a great deal of pressure trading below the 77 level before rallying. This market continues to be wrapped around the equity markets in such a way as to reflect their swings both up and down. Intermediate and long term traders should continue to be short the crude oil market.

Suggested Crude Oil trading instruments:
Non Leveraged ETFs: (Long USO) (Short the ETF USO)
Leveraged ETFs: (Long UCO) (Short DTO)

• US Dollar Index: +100. The Dollar Index continues to climb up towards our target zones of 80.0 and 81.0. Today’s action was very reflective of what is going on in the global currency markets. We continue to be friendly to this market and want to hold positions with stops. This Index is coming from a large energy field that is capable of carrying it much higher. Intermediate and long term traders should maintain long positions with the appropriate stops in place.

Suggested Dollar Index trading instruments:
Non Leveraged ETFs: (Long UUP) (Short UDN)
Leveraged ETFs: (Long) (Short)

• CRB Commodity Index: -100. The Index has now completed the 61.8% Fibonacci retracement that we have been suggesting. We expect the downward pressure in this market is coming to an end, and we may see a reflex rally from current levels. The Fibonacci measurement came from the highs that were seen around April 29 and the lows that came in around August 25, 2010. We expect the trend to continue until our Trade Triangles inform us that the trend has changed. Short, intermediate and long term traders should maintain short positions with the appropriate money management stops in place.

Suggested CRB Commodity Index trading instruments:
Non Leveraged ETFs: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETFs: (Long UCO) (Short CMD)

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Source: INO.TV, October 3, 2011.

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