Monday, December 6, 2010

Rally on Bad Employment Numbers - Market Analysis for week beginning 6th December 2010 by Singaporeseeds

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

Although on weekly charts, all 3 indexes had made a bullish MAP pattern (Moving average pattern as taught by David Elliot) on daily it seems to have lost bullish momentum. The problems in Europe and Korea had not moved the indexes much and the markets actually rallied in the first week this month. This rally is off the 50 day moving average and is a very bullish sign.
Last Friday when the non-farm payroll announced a very much worse than expected employment number, the market shrugged it off and continued to rally. I decided to take my profits and observe the markets for the next few weeks.
Every bearish signal that we had for the past few months seemed to be erased in the last hour of trading and it would really pay to take only the bullish signals. It seems that some invisible hand is directing the markets. Currently, I’m more comfortable trading commodities and individual stocks.

Daily chart for the Dollar (UUP)

The Dollar broke the first significant resistance at around 23.32 and held for 2 days before forming a doji candlestick pattern and then closing below 23.32. I got out immediately. It proceeded to drop and gap and drop. Now its at the 20 day moving average support and lower MOBO support. Should it fail to hold, it will drop to the next support at around 22.65.

Daily chart for Gold (GLD)

Daily chart for Silver (SLV)

Gold and silver defied all bearish signals and continued to rally. It’s worthwhile to note that failure patterns are more reliable than the actual pattern itself. Target for Gold would be at 143 and silver at 31.

Daily chart for Crude Oil (USO)

Crude Oil (USO) had formed a classic fibo retracement pattern together with the fibo fan. Target at 41.84.

Daily chart for Natural Gas (UNG)

Natural Gas (UNG) had bounced off the 50 day moving average. This is a bullish signal and coupled with the gap last night, natural gas is on its way to my target at 7.

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