The weekly TIP chart is in an extreme rally. A really beautiful rally, so much so that the bearish divergence is postponed so many times, it looks almost as if this is a real rally to continue till the cows come home. I would be very very cautious about this, and am a little nervous when I see these kind of charts. The daily chart has gone parabolic, with a bit more to go… If you draw support trendlines, you will find that the recent activity has the support trendlines moving in steeper angles. Now, it is in mania and still has a good week to go.
The weekly JNK bullish rally continues! The indicators are weakly bullish and the stochastics are overbought. The daily chart has had a clear rising triangle and is now at the top end with a beautiful bearish divergence. The Countdown ended and the stochastics is very extreme.
DBB / /HG
The copper chart looks bullish on weekly and daily. Bullish going to rise till parabolic!
According to the above leading indicators, we are in for a bullish week in October!
The USD futures weekly chart do not look good for the USD at all. A steep sell-off in the USD has taken place over the past 5 weeks and is set to continue. However, the daily chart hints of a possible technical rebound. It is holding at the daily extension support of 77.40 with a short term bullish divergence.
SPX / S&P500
The SPY weekly is only at the beginning of another bullish leg, but the daily chart is not only overbought, but also bearishly divergent in terms of volume, strength (RSI), and other intidators. The forward indicators are suggesting a possible pattern breakout failure with 5 more days to play out before a correction.
/GC / Gold
Gold on the weekly futures chart again delayed its retracement and increased its trajectory rally to near parabolia. The daily prices are way out in mania with some strength, but divergent indicators are obvious. The volumes and open interest are supportive of the rally for now, and looks to be so for about another week more.
/CL / Crude
Crude weekly chart is also bullish. The daily prices broke out of a wide range on overbought terms and is consolidating in a narrower resistance range. IF it is to rally, it should be a week of rally to meet the next resistance. However, this may be on the back of bearish divegence that appear in the trading volumes.
VIX / VXX
I like the VIX/VXX charts… the weekly is showing a HUGE bullish divergence. So is the daily chart. The complacency is the market is so intriguing and alluring! Go take a look…
While I am bullish on this week, I would be very very cautious as this rally has to end soon, and it would end quite abrupt and ugly, but not as bad as 2008.
The MadScientist - 11 October 2010
Note: Any material posted here is of my sole opinion, and my opinion may differ from others. It is definitely NOT a solicitation to do anything else as a consequence of reading this material. The material presented here is intended for educational purposes only.