Testing a new format for my technical analysis of the market charts...
/DX (USD Futures)
Weekly DX (USD futures) chart show a three outside up candlestick pattern (http://www.fxwords.com/b/bullish-three-outside-up-candlestick.html) which is a powerful reversal pattern on the weekly charts. This comes along with a significant increase in volume, and is followed by a recovery in RSI and STO. The MACD is still lagging for this case.
Daily DX chart is showing very bullish signals. From 5-7th May, there was a triple doji (http://blog.nobletrading.com/2008/11/doji-tri-star-candlestick-pattern.html) which was followed by a very bullish candle. This candle started with a strong RSI, STO and with heavy volume. A MACD crossover followed the next day as price broke through the first resistance at 75. As of the end of the week, price is at 75.90, just at another resistance level. A strong BUY signal was triggered on 8th May and the trade is still good.
The current Setup broke above the TSDT on the 5th candle and tested twice over the next two days, only to end the 7th candle at a new recent high.
The USD appears to be very bullish in the weeks to come. With this, a couple of things are likely to happen, with commodities taking the first hit, possibly followed by equities as both these classes were rallying over the recent months due to a weak USD.
/CL (Crude Futures)
Weekly CL (Crude futures) chart shows a very strong multi-week rally that ended very abruptly which ended 9 weeks of gain within a week. This sudden correction had heavy volumes but the RSI bounced off the 50 level. The STO is indicating more bearishness. However, price is now at a previous uptrending channel resistance/support.
A new setup in the opposing direction has started with a strong SELL signal triggered.
Daily CL chart shows a quick correction over 4 days and was followed by a short retracement rally which gains were erased in a day. Currently, price is at various support levels with RSI, STO and MACD looking rather bearish. While bearish in overall tone, it remains to be seen if price will follow through by breaking the multiple support levels. This is a “wait and see” case, particularly as the open interest levels are dropping significantly (34000->21000) together with price.
/GC (Gold futures)
Weekly GC (Gold futures) chart is showing an extreme maniac price move that is completed with a three outside down candlestick pattern. The indicators are weakening and a retracement to 1435 should be in place in the coming weeks.
Daily Gold chart is showing a mature rally that has weakening indicators and a Strong SELL signal last week is still intact. Gold appears to be primed for a dip in the coming weeks, at least to the support at 1400.
/ES (S&P futures)
Weekly ES (S&P500 futures) chart is showing a bearish reversal candlestick pattern with stubborn technical indicators.
Daily ES chart show a weakened rally ending and an increasing probability that the interim top is in place with increasingly bearish indicators. It is very likely that the S&P500 will be correcting in the weeks to come, possibly to 1200.
The MadScientist - 16 May 2011
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.