Technical Talk: Daily market update (Thursday, August 18, 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: -100. Today’s action in the S&P 500 is a further reinforcement of the downward trend that has been in place for quite some time. As we said in yesterday’s comments, you must remember that the major trend is down for the equity markets and strong rallies represent shorting opportunities. Looking at the weekly charts, a close at current levels would be extremely negative. The lowest close we have seen on the S&P 500 this year is 1119.46. This is another level to watch carefully. We see this market going lower.

• Silver: +75. Consider these words of wisdom … Do not buy silver because you think it is cheap in comparison to gold. The market continues to be in a broad trading range without a clear-cut trend at this time. Intermediate term traders should be on the sidelines and out of silver. A Chart Analysis Score of +75 indicates a two-way market and a trading range. Let us be patient and wait for our Trade Triangles to kick in and give us a solid signal.

• Gold: +100. The gold market moved to new highs today taking out the previous high of $1814.41. This last surge in gold was caused by a panicky situation in Europe, especially with the European banks. Uncertainty over bank stocks pushed many of the European banks and the US banks to the downside today. Long term, intermediate and short term traders should hang on for the ride and protect profits with stops.

• Crude Oil: -100. $88.32 was a 50% Fibonacci retracement area, and this level was hit yesterday. It was enough to stop this market on the upside. As you know, we have been bearish on crude oil from the weekly Trade Triangle on August 1 at $94.02 a barrel. Long term, intermediate and short term traders should hang on for the ride and protect profits with stops. The longer term trend for crude oil is down based on our Trade Triangle technology.

• US Dollar Index: -60. Our comments today remain pretty much the same as they were yesterday, as there has been very little directional change in this market. The 73.50 level continues to act as support for the Dollar Index. This market has remained in a fairly well defined trading range for the last several months. With a Chart Analysis Score of -60 we would want to approach this market using our Donchian Trading Channels as well as our Williams %R indicator. The Index remains below its 200-day moving average, while our longer-term Trade Triangle remains positive.

• CRB Commodity Index: -100. The CRB Index has turned back from the Fibonacci retracement level of 50% at 332.95. This level was hit yesterday. 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, intermediate and short term traders should hang on for the ride and protect profits with stops.

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Source: INO.TV, August 18, 2011.

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