Tuesday, October 5, 2010

WMA - Trading week ending 8 October 2010

TIP - The weekly TIP chart is still in an uptrend and last week was a spike with volume. The drawback is that there are hairy tops on these candles and they were formed with a volume spike, which indicates that there was a decent amount of selling to get the hairy candletops. The daily chart had rallied twice into mania in recent weeks and has since retraced back in. From a price action standpoint, breaking below the support line at 108.55 confirms a trend reversal bias. The Stochastics, and RSI appear worn out from a long rally. This could be the top for TIP.

JNK – The weekly JNK charts is indicating a bullish rally that should stall soon as it is meeting the resistance the third time. This may be forming a triple top or a H&S formation with 37.5 being the neckline. The mild rally should be stalling with the RSI, Stochastics and Force Index bearish divergent. The daily chart has had a recent mild rally and looks bearish at the moment with weakening indicators and a hanging man / evening star variant at the top.

DBB / /HG - The weekly copper chart looks bullish still. The short term bias is bearish but the longer term indicators still indicate bullishness. The daily chart shows copper overbought for a few weeks and should be moderating this week.

According to the above leading indicators, it looks like this week would determine October’s main direction with markets mostly flattish and very probably to turn about (and thereafter rally like crazy).

/DX - The USD weekly chart suggests that the downtrend continuing to as low as 75.3. The daily chart affirms that there is some more way for the USD to fall further. Indicators for both weekly is confirming the bearish tones, but daily chart is at a support and likely to bounce, with indicators oversold and a bullish harami logged yesterday.

SPX / S&P500 - The SPX/SPY (S&P500) looks very bullish on the weekly chart, with technicals looking bullish. However, the daily chart still has stalled in this rally, and needs a retracement soon technicals deteriorate. The retracement should be on already and this case breaks if a higher high is made with a close.

/GC / Gold  - The Gold futures weekly chart is in the midst of a rally that appears to continue to making a new high. Bearish divergences indicate an imminent correction to the 1000/1100 level. The daily chart is really overbought with a bearish divergence. This significant correction to come soon.

/CL / Crude - Crude weekly chart is about flatly consolidating and a possible breakout of range may be occurring. The daily chart has broken above and currently looks bullish if it does take out the August high, instead of a fakeout.


The MadScientist – 5 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.

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