Monday, July 16, 2012

Bulls eye - 16 July 2012

It was a super duper Friday!
Markets were rallying to reverse any bearishness that preceded the week... so here we are staring down the bull in the eye.

Here is an update of the technical situation:

The ES futures reversed a bearish looking week on the last day and almost cancelled the Sell Signal. However, this is likely to be cancelled, particularly if the bullishness continues. The daily chart shows a strong bounce off the uptrending support. The weekly chart actually reversed significantly and now looks more bullish together with the liklihood of a sustained rally with a previous bounce off the moving averages, followed by MACD bullish turn and candlestick pattern.

Now, if the equity markets will rally, one should expect the USD futures to show some bearish signs. While the bearish signs on the DX do not seem obvious, the DX rally does seem to have been overextended weekly and daily, plus candlestick pattern of the daily is a tad bearish. Expect a week ahead of DX retracement.

Correspondingly, the VIX looks very bearish on the weekly chart, having failed the MAs and bearish MACD. The daily chart reiterates that view with a similar outcome in a reduced time frame. Looks like there is more downside to test support in VIX.

The other interesting chart to look at is Gold. While it might tank hard in a panic, the charts have been forming a triangle which is about to breakout or break down. Weekly charts indicate some bullish divergence and a breakout of the MA ranges would be confirming a bullish stance for Gold. The daily chart looks undecided for now, and a decisive move should follow. Given the ES and DX technicals, the inclination to a upside spike and possible rally for the months ahead is likely.

Have a good weekend ahead!

The MadScientist
16 July 2012

Note: ALL material posted here is from my personal opinion, and my opinion may differ or change without notice. These do NOT constitute as solicitation, investment nor financial advice. By reading the materials presented here, Readers acknowledge the awareness that the materials are intended for educational purposes only. For investment(s) advice, related decisions and/or actions pertaining to investments, always consult your own qualified financial advisors, brokers, etc.
Charts are from TD Ameritrade Thinkorswim platform

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