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.

Gold; volatile but looking good; U.S.$, starting to look good again and oil, who knows where it’s going.

FUTURES COMMENTARY

METALS

Gold: Some volatile moves over the past few days have not changed the basic direction and that is towards higher prices. The basic direction is causing gold stocks to catch on fire again, especially the more speculative ones. My recent recommendation of Laramide Res. is already ahead over 300% in less than 3 months. One can only imagine where stocks will go if this gold move continues on towards the projected $600 value.

Silver: Moved quickly back to the upper levels of a 7 month lateral channel. Now it’s just sitting there undecided what its next move should be. If it moves in sympathy with gold that move should be towards higher levels.

Palladium: Nine months of a wide lateral move and it continues in a roller coaster trend.

Platinum: New highs didn’t last long but the reaction was even shorter lived. Continues in a positive direction but with weak momentum.

Copper: Weak volume and price momentum action but the price keeps hitting new highs. Follow the trend but keep your exits open for a fast getaway.

ENERGY

West Texas Light Sweet Crude: Three week lateral trend causing wide right shoulder off a head and shoulder pattern. A move below $62.50 would be a bearish neckline break, otherwise $68.30 needed to continue the bull trend.

Natural Gas: Up, up and away. Neutral volume and price momentum action is not stopping this trend. It looks like a long cold and expensive winter ahead.

Heating Oil: Continues to move higher but still within the FAN trend lines 2 and 3. Move is labored but could still get back into new highs.

Unleaded Gas: Volume action the best of the energy group but price still far below recent highs.

CURRENCY

Australian Dollar: Has been at $0.76, give or take a couple of cents, for 10 months now and still basically going nowhere.

British Pound: Sharp plunge in price and may be heading back to 1.72 but volume action suggests that plunge may be overdone.

Canadian Dollar: Remains in an up trending channel but heading towards the bottom line, which is at about the 0.843 level. Volume action showing weakness and should be watched.

European Euro: Can’t seem to get any steam for a good rally and it’s back to previous lows. Will it move into new lows? Time will tell.

Japanese Yen: The chart shows the basically negative trend all year. It’s now trapped in a lateral channel and resting on the lower support line. Let’s hope it stays above 0.885 or else who knows where it will end.

Mexican Peso: Taking a rest after a plunge but volume action suggests that more downside still ahead.

Swiss Franc: Must hold above previous .768 lows but volume action is not encouraging.

U.S. Dollar Index: Upside P&F break projecting to new highs but that $90.50 resistance looks pretty strong.

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: Up and down, up and down, the Dow futures have been a real teaser for over 5 months and still not going anywhere.

Nikkei 225 Index: You can’t get a trend any better than this. New price highs, volume highs and momentum highs. With such bullish indicators one might imagine that the only thing left is a surprise reversal.

NASDAQ 100 Index: On the verge of breaking a 5 month up trend line, which would also send the momentum indicator into the negative zone. Caution.

Russell 2000 Index: Starting to look weak but still has support above the 640 level.

S&P 500 Composite Index: Looks like a topping situation with what may be seen as a head and shoulder pattern. Wait and see what happens next.

FINANCIALS

Eurodollar: Euro $ moving sharply lower with volume and momentum confirming.

Federal Funds 30-Day: Sharply lower price with negative volume and momentum but some slight indications that the trend will halt soon.

Treasury Notes 2-Year: Sharp reaction after a good rally has taken price back to previous lows. Some indication that it wants to rest here.

Treasury Notes 5-Year: Not quite back to previous lows but heading in that direction.

Treasury Notes 10-Year: Finding support at previous lows. Now will it hold? Some minor suggestions that it might but go with the existing trend.

Treasury Bonds 30-Year: Support at previous lows still holding and one might expect a little rally from here.

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.


NEWS YOU CAN USE…


Non-gold Companies Making News: International Uranium Corp, Nevada Geothermal Power.