Wednesday, September 5, 2012

Morning Market Analysis

GLD has broken through resistance around the 158 area, rallied, sold-off in a downward sloping penant pattern to the 10 day EMA and moved higher again.  Note the bullish EMA picture and rising CMF/MACD.

The weekly chart confirms the breakout with prices moving through downward sloping resistance.  Also note the bullish CMF and MACD reading.

The big reason for the upward move is the Fed's statement that more easing was probably on the way.  This led people to buy gold out of inflationary concerns.

However, unlike gold, the rest of the industrial metals complex is stuck at two-year lows.  Recent negative readings from the manufacturing complex don't help this situation at all.

The dollar has moved below both the 200 day EMA and lower bands of the Mid-May late August trading range.  Note the deterioration in the EMA picture; the shorter EMAs (10, 20 and 50 days) are moving lower and the shorter EMAs are below the longer.   Also notice the very weak and declining MACD picture.

The Australian dollar -- which had been rallying since early June -- broke through support yesterday.  The reason is China's continued manufacturing slowdown which will negatively impact Australia's economy.