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.
Well, this gold break-out looks for real. Great profits ahead, but exactly where? Knowledge and timing are the key.
Gold: New bull market highs on gold price, new highs in the price momentum and new highs in the volume indicator. What more do we need?
Silver: Still hasn’t broken above its several month lateral trend highs. Volume indicator still underperforming. Silver not confirming the gold break-out. Is there something we should be looking out for?
Palladium: Three day rally but doesn’t look like it has staying power.
Platinum: New rally highs. Price momentum and volume action positive but not overly so. Rest period ahead?
Copper: Sharp rally on unimpressive volume action. We need new highs on increasing volume action to continue to look good.
The market action in the Energy sector does not yet seem to take into account the full potential effects of hurricane Rita. The following comments could therefore change on a moment’s notice should speculators suddenly get into the action, either up or down.
West Texas Light Sweet Crude: Bounce off $62.50 support but indicators are weak and another run at the support may be next.
Natural Gas: Sharp run-up in price but on unimpressive volume and momentum action. Reaction ahead??
Heating Oil: May have a little more upside left but is getting tired.
Unleaded Gas: Action unimpressive. Look for lateral or some more downside ahead.
Australian Dollar: No bull or bear here but more like a lateral trend. Needs new highs or lows to change.
British Pound: Looks like it may be ready for its next leg up. Reaction appears over.
Canadian Dollar: New highs but move is getting laborious. Might be time for a rest period or even a minor reaction.
European Euro: Must hold above 1.214 or else it might continue into new lows. Chart shows solid support level in price, momentum and volume BUT it’s these kinds of support that are prone to a surprise break. Caution.
Japanese Yen: Continues to build a solid lateral base before its next attempt at breaking that wall at the $.92 level.
Mexican Peso: Minor rest is over and the down side should continue.
Swiss Franc: Needs to rally from here or else new lows very likely.
U.S. Dollar Index: If the rally hits 89 then it has a good chance to continue to new rally highs. Otherwise, new reaction lows.
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: Couldn’t break into new highs so it’s trying for the other direction.
Nikkei 225 Index: It just looks like there is no end to this bull trend but it must take a rest pr have a minor reaction sooner or later.
NASDAQ 100 Index: After a failed rally attempt it is back to the down side. Once more sitting on top of its up trend line. Next move will tell us if the line is broken.
Russell 2000 Index: Looks like the rally in the U.S. small cap stocks is over. A move to 640 would confirm it.
S&P 500 Composite Index: Sharp drop unsustainable. Should find good support at around the 1190 level.
Eurodollar: Weakness continues but may be close to a bottom, for now.
Federal Funds 30-Day: May be finding a bottom around this level.
Treasury Notes 2-Year: Broke short term up trend line but bounced off support. May hold above the 103.2 support.
Treasury Notes 5-Year: Broke short term up trend line and bouncing off minor support but bounce may be short lived.
Treasury Notes 10-Year: Minor bounce but indicators are weak and trend may continue to lower levels.
Treasury Bonds 30-Year: Reaction halted very close to previous low. Indicators are weak and low may be breached.
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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