The analysis presented is the view of a pure market technician. There is no attempt to present any fundamental data or information as that is not the expertise of the analyst.

The mid week table includes the Wednesday’s prices, used as if they were the end of week prices for the purpose of calculating the technical information.

Indices taking a hit, financials taking a hit, energies taking a hit but metals are looking brighter.

FUTURES COMMENTARY

METALS

Gold: New highs on Monday and Tuesday sure didn’t illicit any speculative interest. Daily volume action is still very low although the cumulative volume (the On-Balance Volume indicator) is quite positive. Momentum action has been about as lateral as one can get despite the upside price action. The trend is still your friend but I would not be surprised if the trend ends for a while.

Silver: This latest upside break is acting a lot better than the previous downside break. No false move here. Now the only thing standing in the way of a serious move is that last resistance from the Dec high, at $8.25, but it doesn’t look like that will be a real problem.

Palladium: It’s up, up and away. Nothing stopping this trend except for somewhat weak volume action. Hope that improves.

Platinum: Has changed from a 9 month very gentle up trending channel into a three month somewhat more aggressive up trending channel. Continues into new high territory with consistent momentum.

Copper: Latest month long rally into new high territory has been on very weak volume action and cannot be sustained for much longer.

ENERGY

West Texas Light Sweet Crude: Broke head and shoulder pattern and now heading towards $54 within a nice down trending channel. It wouldn’t be a straight down move but will have its positive moments along the way.

Natural Gas: Broke through that third “blow-off” accelerating FAN trend line and now into a downside move. New highs not expected for some time now.

Heating Oil: Still trapped between my FAN Principle trend lines 2 and 3, as it has basically been for 3 months now. Intermediate term still positive but very dangerous here. A break below the third FAN trend line is expected.

Unleaded Gas: Continues to hold above that $175 support but indicators are weak and break expected.

CURRENCY

Australian Dollar: Lateral trend. Needs $.778 on the up side or $.774 on the down side to break out of it.

British Pound: Getting very close to its July low of $1.72 and should stop there for a while.

Canadian Dollar: Is it changing into a lateral trend or down trend? Time will tell but it’s still looking positive on the intermediate term.

European Euro: Fun and games in Germany not doing the Euro any good. It is on support and could remain above the $1.19 mark for a while.

Japanese Yen: Price continues to look weak since breaking support but volume and momentum still stronger than price. Looks like underlining strength creeping in.

Mexican Peso: When it turns, it turns. Plunge not expected to last long but is into new recent lows and may see more.

Swiss Franc: Bouncing off $.77 support but not with any enthusiasm.

U.S. Dollar Index: We now have barriers. Must break 90 to continue rally or 88.3 to reverse to the down side.

INDICES

It should be noted that the comments in this section are based upon the actions of the Indices futures market and not upon the actions of the respective Indices themselves.

Dow Jones Industrial Average: Nothing is coming up rosy for the Dow. Looks like more down side ahead.

Nikkei 225 Index: A sudden plunge and then recovery, now what? 13820 on the up side and 13040 on the down side are the barriers to the next move direction.

NASDAQ 100 Index: Major support break and may now be heading towards the 1415 level.

Russell 2000 Index: Index looks like it just rolled over a mountain and plunged. No serious support till around the 580 level.

S&P 500 Composite Index: All Indices (except for the Nikkei) have dropped like a rock. Next support around the 1140 level. One positive indicator is the low volume but don’t place too much emphasis on that in a down trend.

FINANCIALS

Eurodollar: Seems to have found some stability around the 95.6 level.

Federal Funds 30-Day: Seems to have found some stability around the 96.0 level.

Treasury Notes 2-Year: Still looking weak but volume indicator stabilized and price may soon also.

Treasury Notes 5-Year: Broke Aug support but does not look like it wants to move much lower.

Treasury Notes 10-Year: Move still weak but looks like it may want to stabilize.

Treasury Bonds 30-Year: Broke support on very low volume action but trend is negative and should not be fought.

See you on Monday.

Merv Burak, CMT
Hudson Aero/Systems Inc.
Market Technical Information Group

www.themarkettraders.com

[email protected]

During the day Merv practices his engineering profession as a Consulting Aerospace Engineer. Once the sun goes down and night descends upon the earth Merv dons his other hat as a Chartered Market Technician (CMT) and tries to decipher what’s going on in the securities markets. As an underground surveyor in the gold mines of Canada’s Northwest Territories in his youth, Merv has a soft spot for the gold industry and has developed several Gold Indices reflecting different aspects of the industry. As a basically lazy individual Merv’s driving focus is to KEEP IT SIMPLE.

To find out more about Merv’s various Gold Indices and component stocks, please visit Merv’s Precious Metals Central. There you will find samples of the Indices plus other publications of interest to precious metals investors.


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