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.

FUTURES COMMENTARY

METALS

Gold: Still bouncing around above that $461 support. Rallies do not impress. Must close above $483 with improved volume to impress.

Silver: Action stronger than that of gold. Should see new recovery highs above the $8.00 area soon.

Palladium: Solid rally into new recent highs but could use more upside volume to confirm the strength of the move and solidify its longevity.

Platinum: Continues to move upwards at a constant momentum band. Momentum is near its upper level of the band so an upward surge in price will imply greater strength and most likely further new highs.

Copper: Looks more and more like a topping action with very weak volume and momentum. A close below $174 would be bearish.

ENERGY

West Texas Light Sweet Crude: Momentum and volume action both negative. Price below intermediate term negatively sloping moving average line. More downside still ahead.

Natural Gas: Trapped between the second and third FAN trend lines and within a “box” pattern. Volume action neutral, momentum weak. Odds are that the lower box support will be breached.

Heating Oil: Broke Support and FAN trend line number three confirming a bearish trend in progress. Strong support at $1.80, otherwise next one is at $1.60.

Unleaded Gas: Bearish trend trying to find support at $160. Could go to the $140 support or even the $120 one.

CURRENCY

Australian Dollar: May be the start of a new rally but still within a wide lateral trend.

British Pound: Looks like the beginning of a rally with good upside volume action, but still only a rally not a trend reversal.

Canadian Dollar: Two good upside days may propel Dollar into new highs. Momentum still positive.

European Euro: Continues to hold above the $1.19 support. Looking more and more like a double bottom reversal pattern but needs $1.26 to verify. Intermediate term momentum negative but showing some positive divergence with price action. Short term needs to break $1.225 resistance to move.

Japanese Yen: Still holding at the May 2004 lows but looking weak. Next solid support could be at the $0.83 level.

Mexican Peso: Price, momentum and volume action all seem to be continuing in a lateral trend.

Swiss Franc: Support at $0.77 holding. Double bottom pattern evident. Now on to $0.82 to verify the double bottom. Positive divergence in momentum and a positive volume action helps.

U.S. Dollar Index: Still needs a move to the $91.00 level to confirm a recent P&F upside break. Weak volume and momentum action causes one to worry it will not come.

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: Recent action has been negative but the Index is still within a wide lateral trading band. Volume action already into new lows for advance warning of things to come.

Nikkei 225 Index: Bounce on weak volume and momentum action and may not last much longer.

NASDAQ 100 Index: Can’t seem to make up its mind where to go. All action appears neutral. Wait for strength one way or the other.

Russell 2000 Index: Minor rally seems to be coming to an end. More downside ahead.

S&P 500 Composite Index: Trying to stabilize and rally but weak volume and momentum keeping it from performing.

FINANCIALS

Eurodollar: Interest rate must be heading higher because the Eurodollar is heading lower.

Federal Funds 30-Day: Continues to stabilize but a further decline may be in the works.

Treasury Notes 2-Year: Sharp break into new lows may suggest continued increase in interest rates ahead.

Treasury Notes 5-Year: Same comment as for 2-Year.

Treasury Notes 10-Year: Sharp break and new recent lows but still above the March low. Should continue weak.

Treasury Bonds 30-Year: Same comment as for 10-year. Rally attempt failed.

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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