Technical Talk: Daily market update (October 4, 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 quite a while and find these tools 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. Early yesterday, the S&P 500 index broke through the key 1,120 support area, but closed 3 points higher. We would not rule out our ultimate target zone for this index which is the 1,000 to 950 area. Any rallies back to the 1120 area will in our opinion being met with strong resistance. Intermediate and long term traders should continue to hold short positions in this Index.

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

• Silver: -100. We continue to view the silver market in a negative light, and we would not be surprised to see this market move lower. Resistance continues to be around the $31.50 area and we do not expect this to be broken anytime soon. If we see a close this week below $29.60, it will represent a new low close for silver and a push down to our target zone of $20.00 an ounce. As always 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 put in a large reversal to the downside today which reflects our -55 Chart Analysis Score. When you see scores in this range with our Trade Triangle technology, it indicates a trading range. A close today below $1,618.80 will represent a new low closing price for gold for the last several months. I think most traders would be better off just watching from the sidelines until the volatility subsides. 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: -100. The downward trend in the crude oil market continues with crude oil hitting a low today just below $75 a barrel. Our Trade Triangle technology has been all over this market and is presently short from $96.04 a barrel. The beauty of following our Trade Triangle technology is that it is totally non biased and it follows what the markets are doing, instead of what politicians, the news, or pundits are saying about a particular market. 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. Today the dollar index got within .50 of our target zone of 80 before pulling back on profit-taking. We still believe that the major trend in this market is positive and we expect it to move higher in the weeks ahead. We may have to see some consolidation above the 79 level before this market moves to new highs. 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 money management 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 a 61.8% Fibonacci retracement. We expect the downward pressure in this market is probably 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 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 4, 2011.

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