Tuesday, March 1, 2011

Breaking to New Highs? - Market Analysis for 1st March 2011 by Singaporeseeds

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

The market had been moving in a tight fashion for the past 2 months. This reminds of the period around 2006-07 where volatility dropped to an unprecedented level of around 10. This reflects the lack of fear in the market. Before last week, volatility was at 15 but had gapped and spiked to 23 due to the events in the Middle East.

On the S&P and NASDAQ, the indexes failed to break above an important resistance level that I call Fadhil’s fibo, after the person who discovered this. However for this setup to complete, we will have to see the market form a double top or lower high which I believe would be happening over the next few days. We might just see the lower high today.

Daily chart for the Dollar (UUP)

The dollar is very close to it’s all time low again. This would be 22 on UUP. The is a bullish divergence setup for this. Wait for indication of support and enter for a run up to around 23.3.

Daily chart for Crude Oil (USO)

From my market analysis from 22nd Jan 2011:
Crude did a failure pattern and gapped to below the 50 day moving average. This is a very bearish signal. This is accompanied by a bearish divergence in RSI and MACD. We should see USO going down to around 36 in the next few weeks.

Crude (USO) indeed dropped to test support at 36 twice regardless of the situation in the Middle East. It failed to break below 36 which is a strong support level. We should see USO going up to 41.84 within the next 2 months. This should be around 120 for spot Crude.

Daily chart for Natural Gas (UNG)

Natural Gas is on it’s final dip. Fundamentally and technically, it is poised to rally. However this is only good as a long term investment because this ETF really take its time to move.

Daily chart for Gold (GLD)

Gold did a failure pattern. I believe it is poised to move to new highs over the next few weeks. Target at 155.60. Take note that commodities are on a bullish cycle now until around 2015. It should be quite common to see gold making new highs over the next few years.

Daily chart for Silver (SLV)

Silver (SLV) made new highs yesterday. This reversed the earlier bearish divergence setup in January 2011. We should be seeing SLV at 35.30 soon.

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