Monday, October 31, 2011

Dip in the Uptrend - Market Analysis for 31st October 2011 by Singaporeseeds

Daily chart for S&P


Daily chart for Dow


Daily chart for NASDAQ


Last week's market analysis:
“The market broke to new highs on Friday. Looking at the daily charts since August 2011, the indexes seem to have formed a double bottom with bullish divergence on MACD and RSI. On RSI, we are still within the downward trendline. Other than that, the downtrend seems to have all but ended.

If this rally is to be sustainable, there should be follow through so if Monday closes up. There is a high probability that we are at the beginning of the next rally that should bring us up to 1,370 on S&P.

Resistance at 1,260
Support at 1,215”

Market analysis for this week:
S&P broke through resistance at 1,260 but stalled with a doji on Friday. On futures, the index is back down below the important 200 day moving average but as long as prices do not break below 1,215 the trend at the moment is still up.
We now have a record number of stocks moving in similar pattern. This includes gold and crude oil. Seems like everyone or everything is listening to news reports coming out of Europe and moving with it. The past 3 weeks had been mainly good news but with lingering doubts that the measures taken are not good enough.
I do not think the market has the momentum to rally any further without first pulling back. The rally over the last 3 weeks had been straight up without any dips. Most bell weather stocks are also showing bearish patterns over the past few days. We should get that dip this week.

Support at 1,215 then 1,200.

Daily chart for the Dollar


Last week's market analysis:
“UUP gapped below its 50 and 200 day moving average. This is very bearish and might bring the dollar back to it’s August 2011 lows at 21 for UUP.”

Market analysis for this week:

The dollar is almost at its August 2011 lows. We should see support coming in for the dollar now. I think the dollar should be moving in a range between 21 and 21.75 on UUP.

Daily chart for Gold


Quote from my last market analysis:
“Both gold and silver had been range-bound for the past month. This is not a surprise given that both gold and silver had just a huge move over the few months up and then down.
At this moment, both precious metals still look bearish, with the 20 day moving average forming a resistance level to both metals. I would expect both gold and silver to move down over the next 1-2 weeks.
Target 152.50 for GLD.”

Market analysis for this week:
Gold is moving in a similar fashion to the market and is showing a pause right at its 50 day moving average. This is also at an important retracement level.
The current trend for gold is up, indicated by the bullish divergence pattern on MACD and RSI but it will depend on breaking it’s current levels for the uptrend to continue.

Resistance at 170 then 173
Support at 165

Daily chart for Crude Oil


Last week's market analysis:
“Crude found support at the 50 day moving average on Thursday, forming a hammer, followed by a bullish confirmation on Friday. We should see crude (USO) move up over the next few sessions.

Target 35.17.”

Market analysis for this week:
Crude oil made a huge up move on Monday followed by a gap on Tuesday which hit my target and got out with a fast and nice profit.
There is a range of retracement levels above crude oil followed by the 200 day moving average. We should see crude oil dip this week to around 34.50 to 35.

Daily chart for Natural Gas


Last week's market analysis:
“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.”

Analysis is still the same.

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