Friday, June 25, 2010

Yesterday's Market

For the entire week, the market has been in a clear downtrend (a). When it has moved though key technical support (b, c and d) it has broken support and continued to move lower.

On the daily chart, first note that prices are gravitating around the 200 day EMA (in box f) and have been for the last month. This means that bulls and bears are evenly matched. Prices have tried to rally from this level but found resistance at the 50 day EMA (a). Note the MACD is about to give a sell signal (b) as well. While the A/D line has essentially been moving around a fixed number and therefore really hasn't moved in a big way in either direction for the last two months (c) it has recently moved lower from a slight peak (e).

After breaking key support (a), the dollar has since stabilized right about support levels (b).

For almost two weeks, the dollar has been trading in a pretty narrow range (a).

From a technical perspective, the gold chart has two problems. First, it has made three attempts to cross the 122-123 area and failed (a). In addition we have declining volume (b) for the last part of the rally, indicating weaker participation.

Looking at other indicators, the EMA picture is still very bullish (a), but momentum has decreased (b). The A/D line (c) shows that participation has been about even, but the CMF is decreasing (d).

And the Treasury market is still in an upward trend.