Sunday, October 31, 2010

Calm before the Storm - Market Analysis for 1st November 2010 by Singaporeseeds

Monthly chart for Dow

Weekly chart for Dow

Daily chart for Dow

Monthly chart for S&P

Weekly chart for S&P

Daily chart for S&P

Monthly chart for NASDAQ

Weekly chart for NASDAQ

Daily chart for NASDAQ

All 3 indexes are at important retracement levels on the monthly, weekly and daily charts. This is accompanied by bearish divergences on weekly and daily for Dow, S&P and NASDAQ and many other leading stocks in the US stock market. Daily MACD and RSI for Dow and S&P had begun to turn down while NASDAQ is still stubbornly up although the bearish divergence is also quite obvious. VIX had also made a low and seems to be turning up.

Although the charts are pointing to a major correction in the indexes, this may also be a setup for a major upward movement in the next few days. We still have a couple of important support levels that the indexes need to break through. (wedge support at around 1150 on S&P) The indexes had been moving in a very volatile range just like my trading coach Conrad had predicted late last year and this may give way to either a explosive move up or down from next year onwards. Either way, we are setting up for some very interesting and major moves in the next few months.

Gold (GLD)
Daily chart for gold

Gold is continuing on its uptrend as expected and had broken upper MOBO resistance. As long as it closes above this resistance, it is still good to go. I’m expecting gold to hit 143 in the next few weeks.

Crude Oil (USO)
Daily chart for Crude Oil

Crude Oil has hit major resistance (200 and 500 day moving average) in early Oct 2010 and had been moving in a slightly downward channel for the whole month. The side where it breaks out from will be the side where I’ll be on. I’ve got a feeling this will be up but we have to continue to monitor it to be sure.

Dollar (UUP)
Daily chart for UUP

As fundamentally and technically nothing had changed, I’ll just repost what I’ve said about the dollar since early Oct 2010:
Dollar is still on a downtrend down to my 3 levels of support at 22, 21.94 and finally 21.78.
From the close of trading on Friday, it seems that the dollar downtrend should stop somewhere between 21.78 and 21.94 on UUP.

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