Why Is Today's Market Close Important?

Posted on by The INO.com Team

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Thursday, the 3rd of November.

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Europe cuts rates … and what happened to that missing $600 million?

Europe cuts rates by .50 basis points. New guy, new rules. Jean-Claude Trichet is out and Mario Draghi is in. Now, US regulators are wondering what happened to $600 million in customer funds under MF Global's care. I am sure there is more to come on that front.

It's Thursday and how the market closes today is going to be very important in my mind. If we see the S&P 500 close lower, I think that will be a negative vote for the stock market. Additionally, if we see the bank stocks close lower on the day, I believe that's a negative vote for the banks.

What is gold doing during all of this craziness? It's going higher. Since we started broadcasting, we have continually shared with you the long-term trend for gold, which continues to be positive. That came to the forefront today when more and more investors moved into gold.

What is interesting, is that we're seeing net deposits coming out of banks both in Greece and Italy. This is a disturbing fact and one that will eventually have to be addressed by the private sector and government. What it does illustrate however, is that money can move around pretty quickly when it wants to. We may have already seen a stealth run on the banks in both Italy and Greece.

I mentioned how important it is to see where these markets close today, as it is Friday tomorrow, and we have a lot of nervous,trigger happy traders who may not want to hold any positions this weekend. With the hedge funds largely under performing for the year, you are going to see some hedgies swing for the fences à la Jon Corzine, hoping to make a home run and salvage a poor performance. This will only add to more market volatility.

Okay, now let's go to the charts and see how we can create and maintain your wealth in 2011.
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S&P 500 INDEX
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OUR VIEW: $1220 is the key support for this index

We will view a close today below $1237 as negative for this index. We still believe that the 1220 level holds the key for the S&P 500. With a Chart Analysis Score of +55 we are in a trading range, which could be very broad at this time. Intermediate traders should be on the sidelines waiting for a new Trade Triangle short signal. Long-term traders should either be in cash or continue to hold short positions in this index.

See today's S&P 500 Video Here.
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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
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Suggested S&P 500 Trading Instruments:
Non Leveraged ETF's: (Long SPY) (Short SH)
2 x Leveraged ETF's: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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SILVER (SPOT)
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OUR VIEW: Trading Range

No change in our comments from yesterday. The spot silver market remains in a broad trading range bound by $32 an ounce on the downside and $36 an ounce on the upside. With our Chart Analysis Score reading +55 we seen no clear-cut direction at the moment in this metal. We expect to see more volatility, and a close below 32 as a sign of further weakness. Generally speaking, the major trend for this metal continue to be negative while the intermediate trend is in conflict based on our Trade Triangles. Long-term traders should continue to hold short positions in silver with appropriate stops.

See today's Silver Video Here.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trend = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 60
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Suggested SILVER Trading Instruments:
Non Leveraged ETF's: (Long SLV) (Short the ETF SLV)
Leveraged ETF's: (Long AGQ) (Short ZSL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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GOLD (SPOT)
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OUR VIEW: Resistance at $1,770 basis spot

The Chart Analysis Score for gold shot to a +100 today, indicating to us to be very concerned about what is happening in Europe. Key area to watch for on gold on the upside is $1,770. This level represents a 61.8% Fibonacci retracement. Long-term and intermediate term trends remain positive for this precious metal. Intermediate and long-term traders should maintain long positions with the appropriate money management stops in place.

See today's Gold Video Here.
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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
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Suggested GOLD Trading Instruments:
Non Leveraged ETF's: (Long GLD) (Short the ETF GLD)
Leveraged ETF's:(Long UGL) (Short GLL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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COPPER (DECEMBER)
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OUR VIEW: $3.50 now key support

No changes here, as copper continues to move sideways in a trading range. Copper generally reflects the economic conditions and as such is influenced by equity prices. With a Chart Analysis Score of -55 this metal is in a trading range. Should we see this market close below the $3.50 area we would view that close in a negative light, looking for more pressure for the next several weeks. Generally speaking, the major trend for this metal continue to be negative while the intermediate trend is in conflict with the longer-term negative trend. Long-term traders should continue to hold short positions in copper with appropriate stops.

See today's Copper Video Here.
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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
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Suggested Copper Trading Instruments:
Non Leveraged ETF's: (Long JJC)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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CRUDE OIL (DECEMBER)
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OUR VIEW: Trading Range

Our short term Trade Triangle moved into a positive position moving the Chart Analysis Score to a +70. However, the December contract for crude oil remains in a trading range bound by $90 a barrel support on the downside, and $95 a barrel resistance on the upside. With a score of +70 this market maybe trying to move out of its broad trading range. Depending what happens to equity markets and the global economy will likely be reflected in this commodity. Intermediate term traders should be on the sidelines and long-term traders should continue to be short the crude oil market.

See today's Crude Oil Video Here.
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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
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Suggested Trading Instruments:
Non Leveraged ETF's: (Long USO) (Short the ETF USO)
Leveraged ETF's: (Long UCO) (Short DTO)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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DOLLAR INDEX
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OUR VIEW: Resistance at $77.50

This index really needs to close over near term resistance at $77.50 to get moving on the upside again. Today we expect to see the dollar index trade between the $77.5 area and the $76.00 - $76.50 support level. A Chart Analysis Score of +65 indicates that this market is in a trading range bound by the levels mentioned. Obviously what is taking place in Europe as a major impact on this particular index. We still feel that is going to be resolved in a negative way for the euro and expect this index to continue higher in the long-term. While our longer-term monthly Trade Triangle remains in a positive mode, our intermediate term weekly Trade Triangle remains in conflict. Long-Term traders should maintain long positions with the appropriate stops in place.

See today's Dollar Index Video Here.
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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
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Suggested DOLLAR INDEX Trading Instruments:
Non Leveraged ETF's: (Long UUP) (Short UDN)
Leveraged ETF's: (Long) (Short)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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REUTERS/JEFFERIES CRB COMMODITY INDEX
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OUR VIEW: A close below $316 negative for this index

No change from yesterday's comments. Should the market close below $316, I expect we will see further weakness. Like many of the other markets where tracking right now, the CRB index is in a trading range with a Chart Analysis Score of +55. Resistance is evident at the $325 level and support should be yesterday's low, which was around $315 area. Look for these levels to contain the market for the next few days. The move outside of the Donchian trading channel was a little bit suspect given that our longer-term Trade Triangles remain negative. Intermediate term traders should be on the sidelines. Long-Term traders should maintain short positions with the appropriate money management stops in place.

See today's REUTERS/JEFFERIES CRB COMMODITY INDEX Video Here.
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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
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Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long) (Short CMD)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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Market proven, Trade Triangles catch the big moves.
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:

Chart Analysis Score: 50 - 65 Trading Range
Chart Analysis Score: 70 - 80 Emerging Trend
Chart Analysis Score: 85 - 100 Strong Trend

This is Adam Hewison for MarketClub and I'll see you tomorrow, right here with my mid-day update. Have a productive and profitable trading day.

All the best,

Adam Hewison
President INO.com and co-founder of MarketClub.com

7 thoughts on “Why Is Today's Market Close Important?”

  1. hello everyone

    1- i am thankful to the best and hardworking team of marketclub and ino.com.
    2- always keep in mind that gold is moving against the USD (US Dollar) and the silver is moving by the sport of gold if the gold prices get some higher trend then silver moves up with out any hesitation.

    so if USD goes weaken then gold touches its higher prices again and silver will remain positive to and makes an upward trend.

    as far as crude is concern try to make an intera day trade in it its safe but to go over night its a bit dangerous.

    best of luck ladies and gentlemen

    regards

    atta

  3. Adam, I respect you for sticking to a trading discipline like 'trade triangles'. In the long run it should yield positive results. However, this is one of those times that you're simply sticking with the wrong opinion. We are in for a real hum dinger of a stock rally.

  5. I'm glad you mentioned Italy... it is another one of the PIGS that needs to be addressed. Greece is just the tip of the iceberg and Italy is the iceberg in my opinion... so if you can't fix Greece, how can you fix Italy?

    The European system is near implosion. The European Central Bank is not going to guarantee national debts... he's leaving that to each nation to address.

  6. the agricultural commodities will overide even gold,silver and copper and crude oil as the world population will increase by another billion by2020. where is the water and food going to come from? thin air!!! good fertile non irigated land is going to boom, as the world goes hungry in the next six to eight years. as the world weather goes crazy , so will the commodities market. keep a close eye!!!

Comments are closed.