Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Tuesday, the 2nd of August.
A lower close in the S&P 500 today would mark the 7th day in a row that this index has closed lower. This would be very unusual and probably set the market up for a rally or a dead cat bounce in the next day or two. This market is now trading well below its 200 day moving average. However, the same cannot be said for the Dow Jones index which is just above its 200 day moving average.
Gold moved to new highs today, and it is in an area that we feel is an intermediate target zone between $1,640 and $1,650. We would recommend taking partial profits on long positions, but not getting out of all positions.
Crude oil and the CRB index continue to move back and forth without any real direction at this time.
Now, let's go to the markets and see how we can protect and grow your money in 2011.
S&P 500
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 70
The S&P 500 index is heavily oversold and we would not rule out a dead cat bounce from current levels. Support comes in to this index at 1265 and again at 1250. That is the last vestiges of support for this index. Should these levels give way you will see a mass exodus out of all stocks.
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SILVER (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 85
While gold has soared to new highs and is now in an area that we expect to see some profit taking, silver has not been quite as fortunate. We are still bullish on the market, but somewhat disappointed that it has not moved to new highs along with gold. We are expecting this market to reach its highs towards the latter part of Q3 and early Q4. The intermediate target for silver based on the Fibonacci count of 61.8% is $42.98.
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GOLD (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100
Gold pushed to new highs on continued worldwide demand which has created higher prices. The gold market is now in the area that we have targeted as an intermediate target zone. The 1642 and 1650 levels should present some resistance for this precious metal. All of our indicators remain positive and we would not recommend totally getting out of positions at this time. We would however recommend taking partial profits around current levels of 1645. We continue to like this market from the long side. We are looking for gold to move higher until the end of Q3 and possibly into Q4. Intermediate targets for gold are $1,640 and $1,650.
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CRUDE OIL (SEPTEMBER)
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 85
Crude oil September contract is now trading at the lower range of the Donchian trading channels. The market is heavily oversold and we would not rule out a balance from current levels. The Williams % R indicator is currently in an oversold condition and we are getting close to touching the lower part of the Donchian trading channel. Both of these indicators may represent some support around the $94 level.
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DOLLAR INDEX
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 55
We are hard pressed to get too excited about the current dead cat bounce in the dollar index. It has rallied from the lower levels of being oversold on the Williams% R indicator and the lower levels of the Donchian trading channel. The long-term 200 day moving average remains negative for this index. Resistance remains at 75.00 and support comes in today at 74.00.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 75
The Reuters/Jefferies CRB commodity index dipped into an oversold condition, but continues to move sideways and remains trapped in a broad trading range. We feel that this index is close to making a low for a potential reversal back to the upside. We would not get excited about being long this index until we see the 352 level broken to the upside. At the present time, our Trade Triangle technology is mixed. Resistance is between 349 and 350. Support comes in at 338.50.
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This is Adam Hewison for MarketClub and I'll see you tomorrow same place, same time, have a great day trading!
As always, we rely on our market proven Trade Triangle technology for catching the big moves.
Every success,
Adam Hewison
President of INO.com
Co-founder of MarketClub.com
Yup, it's down alright. Now looking at jobs reports. Lower payroll costs are good for companies, but how long can they keep down-sizing?
It is down, as well as closed below the crucial 200 DMA.
Looks like the SPX got the Red Monthly Triangle. . .
the Bernanke Bull Market is kaput.