Hello traders everywhere, Adam Hewison here co-founder of MarketClub with your 1 p.m. market update for Wednesday the 7th of September.
The song goes like this; "What a difference a day makes..."
Gold, sharply lower on heavy profit-taking and liquidation.
Equities, sharply higher as all the problems in the world are solved.
The U.S. dollar has a hiccup.
Crude oil up on new demand?
All this while the world waits for President Obama's speech tomorrow evening.
Here's a rhetorical question for you, how many cans can you kick down the road at the same time? Well, if you're a politician you become pretty adept at kicking as many cans as you want down the road.
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.
S&P 500
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = = 55
The S&P 500 continues to claw its way back from the lows yesterday around the 1140 area. However, the pattern in this market is not a positive one in my estimation. The Trade Triangles are in a longer-term negative mode. We have to believe that this market is going to resume its downward trend. Today's reading of +55 indicate a sideways trading range. We would use the Williams %R indicator to establish new short positions. Long-term traders should continue to maintain short positions or be out of the market completely in a cash position. Intermediate term traders should be on the sidelines waiting for either a buy, or sell signal based on our Trade Triangle technology.
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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 = + 65
Both the long-term and intermediate term trends for silver remain intact despite the sell-off of the past 2 days. As we mentioned yesterday silver has a Jekyll and Hyde personality based on if traders are thinking that silver is (1) a precious metal, or (2) is it an industrial metal? The Ying and Yang character of this market is sometimes confusing to many novice traders. We expect this market to regroup around the $40 an ounce level. Short term, intermediate and longer term traders should maintain long positions in this market with appropriate stops.
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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 = + 55
The negative engulfing line for gold which we discussed yesterday was confirmed today. This market has now pulled back over $100 in just the last 2 days. To say the market is volatile, would be an understatement. With our long-term and intermediate term trade triangles still intact we have to believe that the trend is still higher. Certainly the $1900 an ounce level is resistance for gold at the moment. The question is where will support come in on the downside? Right now we expect that the $1750 area all the way down to $1700 should be support for this market. Looking at the market visually it would appear as though we have possibly put in a double top. This will only be confirmed with a close below the $1750 level. Intermediate and long-term traders should maintain long positions with the appropriate money management stops in place.
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CRUDE OIL (OCTOBER)
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 October contract in crude oil has once again jumped back to the top of its Donchian Trading Channel. We expect that this area will once again provide sufficient resistance to turn this market back down. Our Trade Triangles are mixed for the moment, indicating a lack of any serious long-term trend. With our monthly Trade Triangle still in a negative mode, we expect that crude oil will continue to move in a sideways manner much like it did for most of August. The longer-term monthly Trade Triangle must be given more weight than either the daily or weekly Trade Triangles.
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DOLLAR INDEX
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 = + 90
The US dollar index has pulled back marginally from what was a tremendous upward swing yesterday. All of our Trade Triangles are in a positive mode and we expect that this market will continue to recruit to build strength to go higher from current levels. The 76.00 and the 76.10 levels are certainly areas where this market should find resistance. The index is heavily overbought on the Williams %R indicator. As we have mentioned before, the monthly Trade Triangles are perhaps the most powerful for setting the longer-term trends.
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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 = Negative
Combined Strength of Trend Score = + 55
The Reuters/Jefferies CRB commodity index jumped to its best levels in the last 48 hours basically because of the move in crude oil. We would not be surprised to see this market pullback to the 325/326 area in the near-term. With a score of +55 we recommend trading this market using the Williams % R indicator, and the Donchian Trading Channels. Our bias is towards inflation in the future, but we are expecting to see more of a two-way market in this index in the next several days. 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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IS PERSONAL COACHING RIGHT FOR YOU?
Give us a call today at 877–219–1482 for a free consultation and see if personal coaching is right for you. The number again is 877–219–1482.
But first, watch my personal message to you about one-on-one coaching:
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This is Adam Hewison for MarketClub, I'll see you tomorrow, right here, same time, have a great trading day.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
ha ha, you can say that again . . . today!
All the speeches and BS in the world can't change the fact that we have allowed the multinational corporations to export our (US)industrial base, that we have spent trillions on foreign wars while our infrastructure crumbles, that the Fed has been buying most of the bonds at Treasury auctions (counterfeiting money) to cover the national debt, that our real unemployment rate is around 20%, which in fact is approaching levels seen in the 1930s and would be there if we brought all the troops home.
Etc, Etc,
Hi Adam, I enjoy watching your 1 PM updates every day. Every informative and great analysis. THANK YOU.
Question: What is the best way of buying/selling the CRB index? Is there a CRB ETF?
Nikesh,
GCC is an ETF that tracks the CRB Index. Here's a link to the chart within MarketClub.
http://club.ino.com/members/charts/?s=PACF_GCC
Best,
Jeremy
Sorry but I need to vent,
I took a huge hit on crude options a few weeks ago mostly because I was under protected for a big downside move, and also because I was on a plane the day everything crashed, coming back from overseas so I had no acccess to my account.
Now I have lost my nerve for trading and all I hear from the "Pros" is oil is going to $60, so as a result I overprotected to the downside and now I have lost even more money.
I have done the same thing for the E-mini. Expecting a test or break of the lows, as the "pros" expect, and now losing money again from not taking advantage of the current up trend, as sites like this and others are saying the market is going down.
Well what happens if all the pros are wrong and the market goes straight up for another year like it did in 2008?
Very Aggggrivated!
Yes, of course. We are playing Symon(the FED) says again. The wave of excess liquidity created by the FED, (cheap money to be borrowed by gamblers and the Carry Trade at rates BELOW INFLATION), sloshes around from market to market, creating fictitious rallies (i.e.:look at the up-gap in the GOLD chart) and distorting NORMAL INVESTING PATTERNS: The Great Wall Street Casino, dedicated to PURE GAMBLING!