Monday, June 6, 2011

And down we go again! - Market Analysis for week 6th June 2011 by Singaporeseeds

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

Quote from my market analysis on 24th May 2011:
“We are still looking at a stimulus to bring the markets to its next leg either up or down. As long as the S&P does not break support at 1320 I’m going to be upwardly biased with target at 1425 for the S&P.”
The 1st of June is usually the most bullish day of the month. That ended up as a long bearish candle that broke 1,320. S&P closed a little above the psychological support level of 1,300 on Friday.
At this moment, S&P futures are below 1,300.
With a bearish MACD divergence and a RSI trendline resistance, the probability of the index moving up had diminished greatly.
If the bearish MACD divergence pattern plays out, this would bring us down to around the 200 daily moving average at 1,250 on the S&P. That is my new target for the month.

Daily chart for the Dollar (UUP)

Quote from my last weekly analysis:
“The dollar dropped below its 50 day moving average on Friday. Seems like the dead cat bounce is over. Target at 19.75 for UUP.”

No change.

Daily chart for Gold (GLD)

Quote from my market analysis on 24th May 2011:
“Gold did a big bullish candle bounce on top of its 50 day moving average on Friday. This is a very bullish sign. Target at 156.”
Gold (GLD) seems to be forming a bearish divergence on both MACD and RSI though that does not necessarily mean it will not hit the target at 156. However this shows that this current rally may be running out of steam.

Daily chart for Silver (SLV)

Quote from my last market analysis:
“Silver (SLV) is approaching resistance at 37.48 and then 38.20. It has to either gap or break above these two levels before it can continue on its rally. This I think will happen over the next 2 weeks.”

Seems to me that it may continue trending upwards in this channel for a while. With the dollar back in a downtrend and inflation rising, the fundamentals favour up. But the huge range of resistance between 36.7 and 38.2 will act as ceiling for some time. Should silver rally above this ranges of resistances, I believe the movement will be drastic and huge.

Daily chart for Crude Oil (USO)

Crude Oil (USO) is bouncing off its 200 day moving average and trendline support. The behaviour of crude is very similar to silver as it seems to be preparing for the next phase of movement be it up or down. I’m favouring up for both now.

Daily chart for Natural Gas (UNG)

Quote from my last weekly market analysis:
“This is it. UNG gapped above its 50 day moving average and is now just below its 200 day moving average. With the two most important moving averages converging soon, we should see some kind of price action this week. I’m thinking up.”
Natural gas (UNG) finally broke above its 200 day moving average. It may take another week or two for the 20 and 50 day moving average to cross the 200 day moving average. This will be the best sign of bullishness for UNG.
However the bearish divergence on MACD and RSI are indicating that there may be some price weakness for UNG over the next few weeks. We may end up seeing UNG going nowhere for a few more months.

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