The analysis presented is the view of a pure market technician. There is no attempt to present an 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.
Gold: Closed above resistance and now headed for new highs. Should make it by the week-end, but we’ll have to see what volume activity is behind this move to know better. That only comes a day later.
Silver: Broke into new recent highs and acting stronger than gold. Now the next test is that $8.28 high of last Dec. Volume and momentum action suggests that high will be history soon.
Palladium: Boy, talk about a bullish trend! Since Sept Palladium has been moving higher with lightening speed. It can’t continue like this forever BUT who’s going to bet against it at this point?
Platinum: Another bullish trend but this one has a problem with volume activity. Volume is not confirming the bullish price trend. Something’s gotta give.
Copper: Another metal that is dangerous to bet against. Copper just keeps on moving higher and higher. Does this suggest continued world wide economic boom or just a scarcity of metal?
West Texas Light Sweet Crude: The basic trend is still towards lower prices with that P&F projection to $46 still valid. Both volume and momentum activity is confirming the basic trend.
Natural Gas: Intermediate term moving average still negative but momentum and volume indicators still on the positive side. Week long rally may continue for a little while longer.
Heating Oil: Since breaking my third FAN trend line it has been down hill all the way, but it now seems to be taking a breather and may rally from here.
Unleaded Gas: Downward slide seems to be losing momentum. Time for a rest or maybe even a rally from here.
Australian Dollar: New lows for past year but will it head back into the mid-$0.60s where it was in 2004? Not yet, a good rally expected long before then.
British Pound: Broke through July support and now what? Volume and momentum very weak but not yet at their lows. The down side is still the path of least resistance.
Canadian Dollar: Short term action and trend somewhat negative but still a long way from negating that P&F projection to $101. We just might see a rally from these levels.
European Euro: Seems to be no stopping the Euro slide. Is it the riots or something more serious? Volume and momentum indicators have still not made new lows and may result in a short Euro rally, but don’t count on it.
Japanese Yen: Wow! If you want to see what it looks like when a chart falls off a cliff, this is it. Seems to have no end in sight.
Mexican Peso: Heading towards the previous Aug highs but seems to be losing steam. Could see a halt in the rally shortly.
Swiss Franc: Four month later move and rally attempt is over and we’re definitely into a bear move. How far can it fall? P&F chart suggests to the $0.645 level.
U.S. Dollar Index: Well, something’s gotta be moving up and it’s the often maligned U.S. Dollar. Next stop may be the $103.5 level per the P&F chart.
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: Seems to be stalling at the previous July/Aug highs. Needs to close above 10750 to break through.
Nikkei 225 Index: Very bullish trend seems to be losing steam with momentum showing a negative divergence. May be time for a rest or possibly a reaction.
NASDAQ 100 Index: Broke into new highs with good volume action but momentum still a concern. May be temporarily topping out.
Russell 2000 Index: The laggard of the Indices. Seems to have topped out and heading lower.
S&P 500 Composite Index: Nice rally but still has to break through that previous 1250 resistance. Weak volume and momentum action suggests new highs may not be in the works during this rally. Topping out?
Eurodollar: Rate of downward move slowing down but still moving lower. Could halt shortly and maybe even rally but don’t count on it.
Federal Funds 30-Day: Still hanging in there at the $96 level, give or take a few pennies.
Treasury Notes 2-Year: Looks very much like a bottoming and reversal action but needs a few more days to confirm.
Treasury Notes 5-Year: Same comment as for 2-Year.
Treasury Notes 10-Year: The chart shows the bottoming and reversal activity from the short term basis. Rally could last for a while and head towards the $110 level as a first step.
Treasury Bonds 30-Year: Same reversal and rally here as for the 10 Year Notes. May head towards the $114 level.
See you on Monday.
Merv Burak, CMT
Hudson Aero/Systems Inc.
Market Technical Information Group
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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