Wednesday, October 13, 2010
Yesterday's Market
Prices gapped lower at the open (a), dropped (b) and then rebounded (c) to a trading range just shy of the previous days close. Prices traded in a range (d) until the release of the Fed's minutes, when prices rallied (e), then consolidated in a triangle pattern (f) followed by a final rally (g).
Aside from round numbers and level (a), prices have little upside resistance at this point.
Treasury prices held near support for the first part of trading, but then moved through support (a) and fell for the rest of the day. Along the way prices had two counter-trend rallies that ended near EMAs (b and c).
Commodity prices opened lower (a), but formed a double bottom (b) and rallied to an a trading range just above the previous days close. Prices consolidated in a triangle bounded by (c) and (d), before moving slightly higher, using level (d) as trading support.
The dollar gapped higher at the open (b) but ran into resistance at previous levels (c). Prices fell to previous support (point (d) on line (a)), rallied to a Fibonacci level and then sold off on the Fed minutes.
The dollar is in a clear downtrend at this point. However, if it was going to have a counter-trend rally look for the 10 day EMA (A) to provide initial resistance.