DMA 24 February 2010 by MadScientist

For a second day in a row, the downdraft continues in the SPX and commodities, much more so in SPX, precious metals, less in crude.

/DX
As usual, the dollar is still leading the direction for now, and it appears to be consolidating at the upper ranges of the boundary. An intraday reversal action is about to be confirmed, at this point of analysis, but the feel is that there will be more upside to the USD although limited. Am expecting a breakout late this week Friday or next week for a couple of days before looking for a new direction analysis.

/CL
Noticed that Interest is increasing, and the daily charts are in a uptrending channel. Crude has lost some ground in opposing fashion to the dollar but has kept its fall from being dramatic. Its divergence from the USD may be beginning. Breaking above or below 79.5 or 78.5 respectively would signal its short term direction.

/GC
Gold is ranging near the lower end, with a gap down 2 days ago. Although it looks like the gap is unlikel to be closed, it is also not committed to close a gap (up) a week ago. Being trapped within ranges of these two gaps, a closing of one of them would indicate the direction. Furthermore, a down close today would increase the probability of Gold going down much further.

/YI
Silver futures charts are clearer and more committed in action. A lower high was qualified 2 days ago and breaking the previous low of 14.70 would be very bearish of silver. If it is to happen, it should happen next week.

/ES
The E-mini futures (S&P500 futures) have a daily reversal signal and hourly action are pointing down. The SPX is likely to open down today.

SPX
The SPX has failed the 50 period moving average (50MA) on daily and hourly. The long down candle yesterday confirms a lower high was qualified (see previous DMA posting for the chart outlook).

Overall, the dollar is mildly bullish but equity markets appear more bearish. Commodities should suffer a pullback due to the dollar’s advance further but Crude is looking to break that relationship.

Watch out for more volatility and downside bias.

~MadScientist~

Note: Any material posted here is my sole opinion, and the opinion may differ from others. It is definitely NOT a solicitation to do anything else as a consequence of reading this material. The material presented here is intended for educational and discussion purposes only.