Wednesday, October 27, 2010

Yesterday's Markets

Treasury prices have been dropping all week. Notice that prices have gapped lower at the beginning of trading (a and b) and closed near their daily lows (c, d, e)

Yesterday, I noted that prices had moved below the 50 day SMA. Here we see that prices have moved through the 50 day EMA (a). Also note the last two days have printed some strong downward bars. Finally, notice the 10 day EMA has moved through the 20 day EMA.

The Treasury market has been in a strong trend for the last approximately 6 months, which has pulled money away from equities. With Treasuries now falling, some of that money may move toward the stock market.

I also noted yesterday the dollar may be forming a short term bottom. Notice that prices have been bouncing near the 10 and 20 day EMA while the 10 day EMA has now turned slightly positive (a). Also note we could be seeing a selling climax with all the volume (b).

Yesterday, stock prices opened lower (a) with a gap down. The EMAs indicated the overall trend was down, but prices moved into the EMAs several times (b) in a standard pennant pattern Prices moved above the EMAs in early afternoon (d) and then started moving higher, forming downward sloping pennant consolidation patterns several times (d). Overall, prices formed a standard arc (e).

Gold prices are still in an upward trend (A), but they are now sitting right at important support (B). Also note that momentum has shifter, giving a sell signal (C).

Copper is also still in an uptrend (A), but prices appear to be topping (A) and the MACD has given a sell signal (B).

Lumber prices have bottomed (A) but they are not really in a strong uptrend either (B). Notice that prices are sort-of moving up, but there is no solid trend in place. Also note the EMAs (C) -- while bullish -- could be stronger (sharper angles etc...).