Tuesday, July 24, 2012

Morning Market Analysis

The Italian (top chart) and Spanish chart (bottom chart) are both in terrible technical shape.  Both are at 6 months lows and below their respective 200 day EMAs.   Both show decreasing (and negative) momentum and weak prices.  Both charts also have prices below all their respective EMAs.  In short, the most logical move for both is down.

Interestingly enough, the emerging Europe ETF is in the middle of a decent rally.  Prices are in an upward sloping channel and are above all the shorter EMAs.  Momentum is increasing -- although its rate of ascent is slowing -- and prices are strengthening. 

The top chart (SPY 5 minute) shows that -- despite the sharp sell-off at the open -- prices rallied for the entire day.  The bottom chart (the 60 minute SPY) places everything in context; for most of the last month prices have been trading in a tight range between 132.5 and 138.

What's fascinating is that -- despite heightened uncertainty in the world as a whole -- gold remains in a very thigh range.