Monday, September 19, 2011

Match of the Week: Bull vs Bear - Market Analysis for 3rd September 2011 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


The market failed to break below significant retracement level at 1,150 and bounced.
This week, we will be going back up to test the 50 day moving average again. If price breaks above this level, we will still need to break above the 200 day moving average. So as of now, I’m still favouring the downside. My take is that it should be a few months before we see the markets at this level again.
My target is 1,000 for S&P by end October 2011. This would be 2,125 for NASDAQ and

Daily chart for the Dollar


Quote from my market analysis two weeks ago:
“The dollar is showing a huge bullish MACD and RSI divergence on daily charts. The downward wedge is now confirmed to be gone so we might see upward pressure on the dollar over the next few weeks.
Upward target at 22 on UUP.“

Quote from my market analysis last week:
“UUP closed at 21.91 on Friday. We should reach 22 at market open next Monday. This sudden spike in the USD shows the fear (and running to safety) of the current global financial situation.”

The dollar moved exactly the same way as I described up to 22 on UUP last Monday and dipped. Not surprising to get a dip after 7 days of continuous uptrend. This week, we should see the dollar continue this uptrend to my next target at 22.75.

Daily chart for Gold


My target for gold is still at 2,000 in the futures market. However it should be noted that volatility increases dramatically at the end of parabolic trends similar to the one that gold is currently in now. Not anyone can stomach these movements and the best advice is to stay out and trade something else.

Daily chart for Silver


Both silver and gold are showing a bearish divergence on RSI and MACD. However with the crisis in Europe getting from bad to worse, the movements in these commodities will be increasingly news driven. This is not good for the consistent traders.
In addition, the rising dollar will weigh down on the prices of all commodities. So I’m not going to trade both gold and silver for a while.

Daily chart for Crude Oil


Crude had formed a rising wedge since the last drop in early August 2011. Now with price moving back up to its 50 day moving average, we will see which price is able to break above.

My take is that it will drop soon, with target at 29 on USO.

Daily chart for Natural Gas


The bullish divergence on RSI and MACD should be a signal for higher Natural Gas prices soon. This is the same for weekly and monthly charts.

We should see the start of a multi-year rally for Natural Gas by the end of the year. As I’ve reiterated numerous times, this is a long term play so be prepared to keep some gas for a couple of years.

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