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.
Boy, this has been a wild ride with the energy futures. Now the big question, “Will it continue?”.
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: The breaking of the short term head and shoulder pattern suggests a move to the $425 level. The bounce on Wednesday is not expected to grow into a significant rally.
Silver: The breaking of the $6.90 P&F support is serious, projecting silver back to its starting point at $4.00, however it now must break the January low of $6.40 or else the recent break may be false.
Palladium: Short term lateral trend continues. Needs 188 on the up side or 180.90 on the down side for next move.
Platinum: Momentum and volume action still neutral but trend still looks towards lower prices.
Copper: Dec contract must stay above that 160 support or else 145 next.
ENERGY
West Texas Light Sweet Crude: Stochastic Oscillator suggesting weakness during new highs. May be ready for a decent rest period or maybe even a minor decline but wait for short term moving average to reverse.
Natural Gas: Momentum overbought. Stochastic Oscillator in negative divergence. Is that a break away gap or an exhaustion gap? Odds are for a quick move back to $10.00 but odds are not perfect.
Heating Oil: Broke above second FAN trend line but not expected to stay there. Momentum weakening. Watch for a move to lower levels.
Unleaded Gas: Price action suggests a rest period about due but volume and momentum suggests this is one energy future that has not seen its final high yet.
CURRENCY
Australian Dollar: Bounce on Wednesday does not look like it has momentum. Trend still to lower prices.
British Pound: Short term downside break found support at intermediate term moving average line and may stabilize or move higher.
Canadian Dollar: Oil strength causing dollar strength but may not last. Still positive trend until it reverses. Resistance at Nov. $0.853 high.
European Euro: May be starting its next leg up but needs to break through 1.25.
Japanese Yen: Still can’t seem to catch on. Lateral trend with strong resistance at the 0.92 level.
Mexican Peso: Latest move may be similar to March move, short decline and then on to new highs, BUT wait for upside break through 0.0941.
Swiss Franc: P&F chart suggests bottoming activity but must break above the 0.807 level to get going.
U.S. Dollar Index: Short term P&F chart still suggests a move to the 82.50 level.
INDICES
Dow Jones Industrial Average: Despite any short bounce or rally, volume and momentum still suggests direction of least resistance is down.
Nikkei 225 Index: Although on a winning streak the volume and momentum action are suggesting weakness. A top of some sort may not be far away.
NASDAQ 100 Index: Bouncing off intermediate term up trend line but action is weak and longevity suspect.
Russell 2000 Index: Latest bounce is suspect until the 670 level is breached decisively.
S&P 500 Composite Index: Bounce is not yet impressive but don’t argue if it goes through 1230.
FINANCIALS
Eurodollar: Bottoming activity suggests higher prices ahead.
Federal Funds 30-Day: Data from data vendor looks suspect so cannot comment at this time.
Treasury Notes 2-Year: Financials seem to be heading higher. Heading towards the 104 level.
Treasury Notes 5-Year: Same comment as for 2-Year but level heading for is the 109.5 level.
Treasury Notes 10-Year: Volume and trend solidly to the up side. Heading towards 114.0.
Treasury Bonds 30-Year: Trend solidly to up side and may breach that previous 119.7 high very soon.
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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