Monday, October 18, 2010

WMA 18 Oct 2010 - the turn of the tides

TIP - The weekly TIP chart shows that it just hit resistance. Although it looks as if it can go for at least another 6 weeks or so, the daily chart hints otherwise. The daily chart shows that TIP has gone parabolic, is in mania and may have just started to reverse. The candlestick pattern and all other indicators no longer look favourable for a rally yet again, and it is about time for a correction.

JNK – The weekly JNK stalls! The indicators are still weakly bullish and the stochastics are overbought. The daily chart has a pattern failure after breaking out of the ascending triangle and it did that with a bearish engulfing followed by a confirmation three outside down variation pattern (http://www.fxwords.com/b/bearish-three-outside-down-candlestick.html). The indicators are also supporting this. Given the ascending triangle breakout failure, this one is expected to tank.

DBB / /HG - The copper chart looks bullish on weekly and daily. Although there are not divergences in the weekly chart, the daily chart is starting to show divergence and the rally is clearly weakening. The current uptrend beginning to cool off as open interest is leveling off with an increase in trading volume. That to me, appears like the big boys are offloading.


According to the above leading indicators, we are in for a likely bearish week.


/DX - The USD futures weekly chart still does not look good for the USD. A steep sell-off in the USD has taken place over the past 6 weeks and should continue. However, the daily chart hints of another possible technical rebound. Friday was the start of a retracement just above the support of 76 with short term bullish divergence.

SPX / S&P500 - The SPY is currently bullish on the weekly charts and on the daily, it has to pop up to a new recent high about 1900 before it retraces back to equilibrate the bearish divergence formed.

/GC / Gold - Gold weekly is clearly parabolic and should be expecting a correction soon. The daily chart shows the RSI and MACD weakening with very short term bearish divergence. Price is in the maniac zone with a candlestick pattern that is similar to a bearish engulfing.

/CL / Crude - Crude weekly chart looks for a retracement before a possible rally, but it appears to remain range bound. Daily chart suggest that the recent rally stalled and is heading down. There is a uptrending channel and all the indicators suggest a short term downside.


VIX / VXX - Although the weekly VIX looks bearish, the daily chart appears to have a bullish divergence forming.


The MadScientist - 18 October 2010

Note: Any material posted here is of my sole opinion, and my opinion may differ from others. It is NOT a solicitation to do anything else as a consequence of reading this material. The material presented here is intended for educational purposes only.

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