Saturday, April 16, 2011

Decision Time for the Markets - Market Analysis for 18th April 2011 by Singaporeseeds

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

Quote from my market analysis from 26th March 2011:
“It is very important that the indexes break these resistance levels. Should the indexes form a double top at these levels, we will be seeing some longer term downtrend in the indexes that should bring S&P down to around 1000.”

The market closed like a double top for the indexes with NASDAQ at its 2007 high. Although all 3 indexes are still slightly above their respective 50 day moving average and may just bounce back up, this looks like a failure to break above to me. We are now halfway through the most bullish month of the year and if the other half ends up like the first half, we might just end up at 1000 for S&P over the next few months.

Daily chart for the Dollar (UUP)

The dollar broke to new lows and will continue to make new lows over the next few weeks. First support at 21.30 and then 21.10.

Daily chart for Gold (GLD)

Daily chart for Silver (SLV)

Both gold and silver broke to new highs over the past 2 weeks. Both are moving inversely proportional to the dollar. This shows that there is a flight from the dollar to the safety of commodities, mainly gold and silver. With the mass printing of dollars by the Fed, we would see both gold and silver making new highs while the dollar falling for the foreseeable future. Resistance for gold would be at 156.15 and silver at 43.20. I expect both to blast through these resistance in a flash.

Daily chart for Crude (USO)

With the problems in the Middle East, expect crude to continue its rally. Next resistance at 48.

Daily chart for Natural Gas (UNG)

UNG had been forming bullish divergences for the last 12 months. There was another bullish divergence entry signal 3 days ago. We’ll see if this one works out. Target at 13.65.

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