Market Update, 2009.08.30

30. August 2009
Comments (0)

ES Daily - After a solid week of "doji" type behavior, we are left with indecision.  During the beginning of June, we had similar action then a very nice pullback (see arrows on chart below).  We are also in a rising wedge, which also typically signals a breakout.  Logically, since the recent rally over the past couple months was very quick, I would be surprised if we have an even more steep breakout to the upside.  (If we do, I would image it very short lived, with an immediate spike down.) As mentioned in the past, we continue to have nice divergence on the 3/10 oscillator.

 

NQ Daily: Similar action as the ES with the rising wedge, but the "pop" above recent highs wasn't so clean.  There is also nice divergence in the 3/10 as well. 

 
 
YM Weekly: The dow recently hit the highs seen in November of 2008 and has backed off a bit. If we are to head higher, this is a level to watch for.
 

 
 
$TRAN Weekly: The Transports hit the 50% retracement from their all-time high almost exactly.  Resistance?
 
 
$BANK Weekly: Hitting a level to watch...
 
 
 
ZB Daily: The bonds are starting to show some strength.  After a pullback, they seem to be heading higher.  The 21ema (green line) acted as resistance on the way down (left, two arrows) and recently bounced off it as support (right arrow).  Sign of a trend change?  However, we can't ignore the double top it is currently facing.  So we will need to watch this very closely.  Bonds typically rise as people turn to them for safety, so a break to the upside from here could be a sign to watch for a turn in the market.
 
 
 
CL Daily: Oil has continued its march higher.  After bouncing off a 50% retracement in mid-July, it has continued to make measured moves higher.  This past week it broke the recent highs, but quickly found some buyer's remorse.  Will this 73 area continue to act as resistance or will we break higher?  Oil is something to watch, since higher old prices can't be good for the US economy.  Current targets are 80, then 90.  However, if the USD rises, this could put some downward pressure on oil.
 
 

6E Daily - The euro is starting to look heavy and the RSI is showing signs of divergence.  This is bullish for the USD.  Currently, the Dollar Sentiment Index shows only 3% bulls.  That's the kind of extreme that can't be sustained.
 
 
 
DBB Weekly: (Metals ETF) If the USD is to rise, it means that metals and commodities are to fall.  Currently, the metals are reaching a 50% retracement from a notable swing high.  If the metals were to fall, this would be an appropriate place.
 
 
IYM Weekly: (Basic Materials) Similarly to above, IYM is at a level to watch. This sector is sensitive to changes in the business cycle, thus depends on a strong economy.  If our economy turns weak, look for IYM to follow.
 
 
 
 

Market Update

Disclaimer

By downloading and using any of our studies, you agree to the following disclaimer:  
 
Past performance is not necessarily indicative of future results. The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.  
 
In considering whether to trade or to authorize someone else to trade for you, you should be aware of the following:
  • If you purchase a commodity option, you may sustain a total loss of the premium and of all transaction costs.
  • If you purchase or sell a commodity future or sell a commodity option, you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position.
  • If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position.
  • If you do not provide the requested funds within the prescribed time, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account.
  • Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a "limit move".
  • The placement of contingent orders by you or your trading advisor, such as a "stop-loss" or "stop-limit" order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.
  • The high degree of leverage that is often obtainable in commodity trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains. This brief statement cannot disclose all the risks and other significant aspects of the commodity markets. Before you trade you should inquire about any rules relevant to your particular contemplated transactions and ask the firm with which you intend to trade for details about the types of redress available in both your local and other relevant jurisdictions.
 
 
neoTOOLBOX.com does not guarantee results, information, or EFS studies and scripts in any shape or form.