Friday, October 19, 2012

Morning Market Analysis

The Chinese market has broken through resistance at the 35.5 level and advanced for the last five days.  We see a strong MACD picture and rising EMAs.  Short-term resistance is right about 37.5.

The homebuilders ETF has been consolidating between 24.5 and 26.  Now prices are right at upside resistance at the 26 price level.  The MACD has given a buy signal.  Given the strength of the housing starts news yesterday, this is a sector that stands a strong chance of breaking out.

The QQQs are in the middle of a downward sloping consolidation pattern.  Prices rebounded to the 61.8% Fib level of the mid-September-mid-August sell-off before moving lower.  Notice the increase volume yesterday along with the bearish MACD reading.  Finally, prices tried to advance over the 50 day EMA and couldn't maintain their strength.

The grains ETF has sold off to the 61.8% Fib level over the last few months.  However, prices yesterday placed them right at the edge of breaking through upside resistance.  This potential move would jibe with the MACD which is about to give a buy signal.

The general trend for the euro over the last three months has been to move higher.  But notice this is not a strong rally where price are moving up continually over a period of time.  Instead, we have a moves higher followed by consolidation; sharp moves up followed by fairly lengthy moves down.