Thursday, June 10, 2010

Yesterday's Market

First, congratulations to the Chicago Blackhawks for winning the Stanley Cup. It was a great series, but Chicago had the edge. I am very pleased they took the cup home (especially with the say the Cubs look this year).

Now, let's start with the dollar.

First, note that over the last 10 days, the dollar is in a clear uptrend.

On the first daily chart, note the EMAs are in a very bullish posture (a)and indicate the short, intermediate and long-term trends are up. However, volume has been dropping since the beginning of May (b).

The A/D line and CMF indicate money is flowing into the market, but at a weak rate (a and b). The MACD (c) is pegged.

The strong dollar is one reason we're seeing a drop in commodity prices. Industrial metals are still in their downtrend, bounded by lines (a) and (b). The EMA picture is turning more bearish; all the shorter EMAs have crossed below the 200 day EMA and prices are below all the EMAs. the A/D line and CMF are weak (d and e). Finally, momentum is nil (f).

After bouncing from its lows, oil is now in a consolidation pattern just around the 10 and 20 day EMAs (a). While the EMA picture is generally bearish (b), note the 10 day EMA is starting to move more horizontally. The A/D and CMF indicate some money has moved back into the market, but must importantly, the MACD us given a buy signal.

The daily chart shows more detail regarding the consolidation pattern. Note that prices have basically consolidated in two areas (a and b).

In yesterday's market, prices gapped higher at the open (a), but peaked at 10:30 (b). They then moved lower, but slowly until the shorter EMAs crossed over the 50 minute EMA (c). Then prices dropped hard (d) in higher volume.

Finally, yesterday I noted the SPYs appeared to be forming a double bottom (a). That appears to still be a viable argument.