Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Friday, the 2nd of September.
It would look as though September is living up to its reputation as one of the most treacherous months in the stock market.
The S&P 500 has pulled back close to where it closed last week. The 1230 area is still acting as a key area of resistance for this market and happens to be a 50% Fibonacci retracement.
Gold and silver on the other hand are positive for the week, with gold being up approximately $50.
Crude oil dropped down to be practically unchanged and met the technical picture we were expecting for this market.
The same can be said for the dollar index, which rallied from the key support level of 7350 and the CRB index is up about $1.50 for the week.
We will be doing our weekend broadcast on Saturday, summing up how these six markets closed for the week. This is going to be a very important and perhaps pivotal week in the markets. So don't forget to catch our weekend update on Saturday!
Now, let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.
S&P 500
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 = - 55
The S&P 500 index came under heavy selling pressure yesterday and today. As we mentioned yesterday, the months of September and October are particularly treacherous for the equity markets. It would look as though the first two days of the month are bearing that market maxim out. For many traders, the close on Friday is a very important event as it illustrates what traders are comfortable with to take home for the weekend. The pullback from the 1230 level, which represents a 50% Fibonacci retracement, was certainly complete with today's action. Long-term traders should continue to maintain short positions or be out of the market completely, and in a cash position. Intermediate term traders should be on the sidelines waiting for either a buy or sell signal based on our Trade Triangle technology.
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SILVER (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trend = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100
Our Trade Triangle technology was in the right place at the right time and caught the upward move in silver today. The sideways action in this market has been broken and it would appear as though we're getting ready to test the highs around $44.21 basis the spot silver market. The mini energy field that we talked about yesterday helped this market explode with its best upward move since August 19th. As of this writing, silver is only $.70 from its all-time high close for the year. Short term, intermediate and longer term traders should all be long this market at the moment with appropriate stops.
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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 = + 90
The gold market put in what can only be described as a solid gold performance. Should gold close where it is presently trading around the $1,873 level, it will be a all-time high weekly close in this market. Our analysis of the gold market building support getting ready to move higher was correct, and all of our Trade Triangles are in a positive mode. With a +100 Chart Analysis Score it would appear that this market remains in a strong upward trend. Short term, intermediate and long-term traders should maintain long positions with the appropriate money management stops in place.
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CRUDE OIL (OCTOBER)
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 70
The pullback from the top of the Donchian Trading Channel was completed today with the sharp downward move to the $85.40 area basis the October contract. The +55 Chart Analysis Score indicates a trading range. One should be looking at the Williams % R indicator and the Donchian Trading Channel itself. At the present time, our long-term monthly Trade Triangle is negative while the short term daily and weekly Trade Triangles are positive. This is creating a mixed picture at the moment for crude oil. However, the longer-term monthly Trade Triangle must be given more weight than either the daily or weekly Trade Triangles. We expect this market to pull back from current levels and from the top of its Donchian Trading Channel.
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 = + 75
This index is quickly reaching the upper levels of the top of its Donchian Trading Channel and is in an overbought condition. We expect that this combination will be enough to halt the current rally. At the moment, our Trade Triangles are presenting a mixed picture for this index. We believe that this market is still in a broad trading range with resistance coming in around the $75.00 mark. The index remains below its 200 day moving average, while our longer-term Trade Triangle remains positive.
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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 = Positive
Combined Strength of Trend Score = + 60
The Reuters/Jefferies CRB Commodity Index pulled back from the top of the Donchian Trading Channel. This market is heavily overbought at these levels. We would not be surprised to see further profit-taking coming in to this index and a price correction from current levels. Our bias is towards inflation in the future, but we are expecting to see more of a two-way market in this index in the next several days. Intermediate and short term traders should be out of the market and on the sidelines at the present time.
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As always, we rely on our market proven Trade Triangle technology for catching the big moves.
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This is Adam Hewison for MarketClub and I'll see you tomorrow, right here at 1pm. Have a great trading day.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
everyone in the world is so very negative usually means positive- regardless of the charts- history has been stated 1. the yield on the s & p and dow greater than the treasuries- bullish
low interest rates- like zero has never been bearish for stock- limited inflation- bullish
the herd is extremely bearish-- bullish
where are you going to put your money- in cd's for 1% or the gold bubble like the rest of the herd!
cannot find anyone bearish towards gold~ bullish for equities
very bullish towards oil long term- forget the solar and windmill and all that green crap and global warmer- look at your solar and wind stock can you say slaughtered!
agree sept and oct are the worst, but since everyone anticipates it ~it just might be bullish
My favorite investment sport is Gold & Silver and i already got nice return from precious metals.
1230?? That's SO five minutes ago! The Captain is yelling, "DIVE, DIVE, DIVE" and we all have our wetsuits on, just in case.