Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Monday, the 29th of August.
It is hard to believe, but I am actually sitting in a Starbucks coffee shop writing this report. Irene certainly did her damage on the East Coast, and we like millions of other folks are without power today. It would appear that we were lucky with the hurricane, as many other folks were affected much more than us.
We are running on generator power at our headquarters in Maryland, however many of our staff on working from home today because of Irene.
Watch this weekends video here.
So let's look at the markets, and see what's going on. The equity markets are now approaching the highs that they put in about a week ago and are quickly reaching an overbought condition.
Gold which made a remarkable recovery late last week, looks to be on the defensive and stuck in midrange.
Crude oil is reaching the upper levels of its trading range, and is moving into an overbought territory. We are looking for this market to turn back down.
The dollar index continues to flirt with support at 73.50, which has proved to be major support for this market.
Watch this weekends video here.
Now, let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.
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S&P 500
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 55
The long term trend for the S&P 500 is still negative despite today's rally. This index has finally moved into an overbought condition and we would expect to see a reversal from the high that was seen on August 17th, at 1208.47. With a Chart Analysis Score of - 55, this market is in a trading range with a negative bias to the downside. We are still viewing this market in a longer-term bear trend.
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SILVER (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trend = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 75
The technical picture for silver is much the same as gold, as silver remains trapped in the middle of this range. Both our long-term and intermediate term trends are positive and we expect to see silver regroup above the $39 an ounce level. Overall to this observer, it would appear as though the silver market has for the time being, topped out.
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GOLD (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 75
After an extremely volatile last week, the gold market should be settling down to a more normal trading style. At the moment this market is stuck in the middle of both its price range and the Williams % R indicator. The major and intermediate term trends are still positive and we would approach this market from the long side if given the right technical picture. If you're not in the market at the present time, we would suggest a sidelines position until we settle down to more normal trading conditions. Long Term and intermediate term traders should stay disciplined and hold onto long positions and of course protect profits with money management stops. Short-term traders should now be on the sidelines and waiting for a new long entry point.
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CRUDE OIL (OCTOBER)
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 55
IMPORTANT NOTICE: Please note that our comments are based on the October contract. The crude oil market is putting in a positive performance so far today. However, it is still in the confines of a downward trend. The highs seen on August 17th, at 89.19 should hold the current rally in check. The market is also rapidly approaching an overbought condition which should probably thwart some of its upward momentum. Both monthly and weekly Trade Triangles are in a negative mode, indicating that the longer-term trend is down.
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DOLLAR INDEX
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 60
The dollar index continues to find good support at the 73.50 level. Previously the dollar has rallied from this area which is now in an oversold condition. Our indicators show a - 60 Chart Analysis Score which indicates a trading range. We would not be surprised to see a bounce come into this index in the not too distant future. We would want to trade this market using our Donchian Trading Channels and our Williams %R indicator. The index remains below its 200 day moving average, while our longer-term Trade Triangle remains positive.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 70
The CRB index has rallied quite dramatically from the lows that were seen on August 9. This index has now retraced back to 337.21 which is a 61.8% retracement. This is an important Fibonacci turning point. The market is also in an overbought condition, similar to what was seen in July. We would expect that this market will once again pullback from current levels. Our bias is towards inflation in the future, but I'm expecting to see more of a two-way market in this index in the next week or so. Intermediate and short term traders should be out of the market and on the sidelines at the present time.
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As always, we rely on our market proven Trade Triangle technology for catching the big moves.
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This is Adam Hewison for MarketClub and I'll see you tomorrow, right here, at 1pm. Have a great trading day!
Hey Adam, appreciate you turning out during the turmoil, you are a good soldier.
Hi,
The updates I rec'd were simply the best, precise info with the comparisons of short term, intermediate to long term, which I think it's kind of a quick guide for investors whether to enter the market or stay put.
Thanks and Best Regards,
Alex Ng