Monday, September 10, 2012

Morning Market Analysis

There's good and bad news in the above charts of the major US averages.  The IWMs show a strong move higher by printing two strong bars at the end of last week.  As this market is really more of the risk based market, this is an encouraging sign.  However, the QQQs (middle chart) didn't print any follow through and the SPYs (bottom chart) printed a weak bar on Friday.  Considering the strength of the underlying technicals (rising CMFs and MACDs giving buy signals) these weaknesses aren't fatal, but they do mean the current rally is a bit suspect.

Gold has broken out to a new high with prices of the GLD ETF moving through two important areas of resistance (the first at the 158 level and the second at the 166 level).  The reason for this is the EUs move into the bond market and the potential for the Fed to engage in QEIII -- both of which are raising inflation fears.

The weekly GLD chart shows the latest move.  Prices have moved through resistance with the next logical price target at the 175 level.  Also note the bullish CMF and MACD position; this chart has some room to run.

Oil rallied from a low in the high 70s at the end ot June to 97.5 in mid-August.  Now prices are consolidating gaisn in the 95-97.5 area, using the 20 day EMA as technical support. 

There are a few ways to look at the weekly oil chart.  First, we have a high established in mid-2-11 and a low in the fall of 2011 with prices simply moving between those two points for the last year.  You could also argue that price are in the middle of a triangle consolidation with an incomplete rally in progress.