Technical Talk: Daily market update (October 7, 2011)
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: -55. We believe that if the S&P 500 Index closes lower today, we will put in a interim cyclic top. Last week the S&P 500 Index closed at 1131.42. [PduP: closed a bit higher at 1,155.46 on Friday.] What we need to see is a weekly close below the 1,120 area if this market’s going to go down and test the zone of 1,000. We still believe that is going to happen based on our long term Trade Triangles that remain negative on this Index. We would not rule out our ultimate target zone of 1,000 to 950. Intermediate and long term traders should continue to hold short positions.
Suggested S&P 500 trading instruments:
• Silver: -75. At the moment we cannot get excited about the silver market as it continues to move sideways. Next week should offer more clues as to the next big swing in this market. Silver is higher for the week and possibly putting in a bullish engulfing line on the previous week’s market action. Should this happen, it would indicate that we have seen a low in the price of spot silver. Our Chart Analysis Score is -75 indicating some of the downside pressure has been relieved. As always we will rely on our 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:
• Gold: -55. Not much change in the spot gold market from yesterday. Gold continues to consolidate around the levels mentioned in our previous blog posting. However, the Chart Analysis Score remains at +55 indicating that a trading range in the short term is very much intact. We would not be surprised to see this sideways action continue for another week or so. For the week, gold is slightly higher by about $16 an ounce. 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:
• Crude Oil: -55. The market action in crude oil is similar to what we witnessed ten days ago as the crude oil market moved over the middle average of the Donchian trading channel. A close today below $82 a barrel we would view as very negative and that this market has put in the top. [PduP: WTI crude closed at $82.98 on Friday.] We would then look for this market to move down to challenge the $75 a barrel range again. As you know, this market has been closely tied in to the movements of the S&P 500. Overall we still view the trend in this market as negative. We would not be surprised to see a move down to the $70 a barrel level. Intermediate and long term traders should continue to be short the crude oil market.
Suggested crude oil trading instruments:
• US Dollar Index: +75. Today’s pullback in the Dollar Index reached 78.26 which is a 61.8% Fibonacci retracement. Overall the positive trend for this Index remains intact and we expect to see some consolidation around current levels before resuming its upward path. We continue to be friendly to this market and want to hold positions with money management 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:
• CRB Commodity Index: -90. The CRB Index rallied a little further than we expected, however it is in the resistance zone and we expect to see it move down next week. We would not rule out a retest of the recent lows. 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:
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Source: INO.TV, October 5, 2011.
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