Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Thursday, the 18th of August.
The Trend is Your Friend - How true those word are today!
We have been on the right side of the markets for quite some time now. It is in times like these when technical analysis really shines. It doesn't matter if you have a strong upward trend in gold or a downward spiraling trend in stocks, technical analysis works.
In case you missed last night's MarketClubTV show, please check it out HERE and see what we were saying about bank stocks and the market as a whole.
We feel we have a target rich area for trading opportunities right now. Some of the best money can be made during periods just like this. A key to being successful in markets that are having large moves is to be disciplined and follow MarketClub's Trade Triangles.
So 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 = Negative
Combined Strength of Trend Score = - 100
Today's action in the S&P 500 is a further reinforcement of the downward trend that has been in place for quite some time. As we said in yesterday's comments, you must remember that the major trend is down for the equity markets and strong rallies represent shorting opportunities. Looking at the weekly charts, a close at current levels would be extremely negative. The lowest close we have seen on the S&P500 this year is 1119.46. This is another level to watch carefully. We see this market going lower.
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SILVER (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 75
Consider these words of wisdom... Do not buy silver because you think it is cheap in comparison to gold. The market continues to be in a broad trading range without a clear-cut trend at this time. Intermediate term traders should be on the sidelines and out of silver. A Chart Analysis Score of + 75 indicates a two-way market and a trading range. Let us be patient and wait for our Trade Triangles to kick in and give us a solid signal.
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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 = Positive
Combined Strength of Trend Score = + 100
The gold market moved to new highs today taking out the previous high of $1814.41. This last surge in gold was caused by a panicky situation in Europe, especially with the European banks. Uncertainty over bank stocks pushed many of the European banks and the US banks to the downside today. Long Term, intermediate and short term traders should hang on for the ride and protect profits with money management stops.
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CRUDE OIL (SEPTEMBER)
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
$88.32 was a 50% Fibonacci retracement area, and this level was hit yesterday. It was enough to stop this market on the upside. As you know, we have been bearish on crude oil from the weekly Trade Triangle on August 1st at $94.02 a barrel. Long Term, intermediate and short term traders should hang on for the ride and protect profits with money management stops. The longer term trend for crude oil is down based on our Trade Triangle technology.
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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
Our comments today remain pretty much the same as they were yesterday, as there has been very little directional change in this market. The 73.50 level continues to act as support for the dollar index. This market has remained in a fairly well defined trading range for the last several months. With a Chart Analysis Score of -60 we would want to approach this market using our Donchian Trading Channels as well as 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 = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
The Reuters/Jefferies CRB commodity index has turned back from the Fibonacci retracement level of 50% at 332.95. This level was hit yesterday. While our bias is towards inflation, the index is currently indicating that we are in more of a deflationary scenario. We want to remain patient and let our Trade Triangles signal when this market has made a trend change to the upside. Long Term, intermediate and short term traders should hang on for the ride and protect profits with money management stops.
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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 1 p.m. Have a great trading day.
Every success,
Adam Hewison
President of INO.com
Co-founder of MarketClub.com
Last week you got scolded quite severely by some of your readers about inept political leaders (which I believe you were right on). You analysis is great! Keep up the good work.
And, clearly the trend is down !
Rick,
I agree with you too.
Most politicians in power today have never so much as operated a lemonade stand, which means they've never had to meet a payroll, never had five times as many requests for money as money in the bank, and never had to put up with 1000 miles of government red tape to get even the simplest of things done at a business.
But...they sure do know how to kiss babies, shake hands, and prepare photo ops.
In the 18th century, calling someone a "politician" was considered an insult. Nice to see history repeating itself.
You folks are scaring the hell out of me. I am 70YO and don't have the luxury of making a mistake. Under my mattress is looking better everyday. The problem seems to be that the guys, and girls making the ground rules, don't seem to know a thing about finance. That is like letting a 6 YO drive your car in traffic. What a revolting development ALICE!!
Rick,
I agree with you.
Adam
Appreciate the service provided by this web site. You have helped me by warning me of holdings which need to be sold and I have followed your advice. The result is clearly beneficial to my well being as my wife is no longer looking over my shoulder and is now happy shopping. As stated by the previous comment, have been trading precious metals for several years and have recently increased my allocations of Gold over silver. The runaway price movement of Gold reflects the buying of central banks and all those who understand economics and the failure of governments to do what is right for the country. They all want to take the easy route and even attack those groups who attempt to do the right thing. That article by two idiotic professsors who deride the Tea party and rate it belong the terrorists organization is part of the corruption endemic in our universities. I say this is a good time to get rid of some professors who have preyed on college students and graduate thousands who graduate without any kind of skill to find a job. Those are the liberal art students who have thousands in debt and are selling clothes at some Dept. stores or waiting on tables. The only difference is that they have this huge debt that a high school graduate does not. This tells me that the corruption in our educational system needs to be investigated.
Hi Adam,
Except for gold (according to the triangles), where do you see any money being made unless it is by shorting? And I thought you preferred we didn't use the triangles to short - especially if we're new to that sort of investing.
Thanks,
Donn
Donn,
Watch this video we just put on the blog.
http://club.ino.com/trading/2011/08/skf-the-banks-and-fibonacci-trading/
Thanks,
Adam
Well, it should be starting to become perfectly clear to those who know nothing about economics and to those who know, or SHOULD KNOW (Bernanke, Geithner, Greenspan, The Wall Street crowd) that you CAN NOT violate basic economic principles and get away with it forever. The IDIOTIC FED attempt, initiated by Greenspan and continued by Bernanke to print their way out of a recession/depression is starting to show results: a long term tanking economy and stock market and a good possibility of a complete financial collapse!! GOOD LUCK AND KEEP BUYING GOLD TO S Y A!!!