Friday, June 4, 2010

Yesterday's Markets

Let's start with the Treasury market.

The daily (5-minute) chart shows that prices are slowing moving lower. This chart gives us the best view of the Island reversal for last week.

The technical side of the market says we're moving lower. Prices formed an island reversal (a) and then moved below the upward sloping trend line (b). We've seen money flow out of the market (c and d) and the MACD has given us a definite sell signal.

Yesterday, gold broke it's recent uptrend at (c). As I observed yesterday, the GLD chart is a bit weaker on its recent rally, with smaller bars and weaker technical indicators (MACD and CMF).

However, the Treasury market is not the only safe haven market. The dollar has also risen. But there are problems with the rally.

While prices have found upside resistance right around the 25.50 area (a), notice the number of fairly extreme selling events over the last 10 days.

b.) Prices gap higher but them move lower for the entire day.

c.) prices open lower, rally, but then drop massively.

d.) Prices gap higher but then move lower throughout the trading day.

e.) Prices gap higher, but then move lower throughout the day.

There are at least 4 daily moves where prices moved higher but then went lower. That is not bullish.

The above chart also shows the triangle consolidation pattern prices are currently forming.

Industrial metals are extremely concerning:

We've seen two price advances stall at the 19.50 level(a and b). For the last three days, prices have gapped lower (c, d and e), even with one day (d) showing an incredibly strong advance.

Oil has been trading in a range for the last 5 days.

Oil's daily chart shows some strength. After hitting bottom, prices have rebounded and are consolidating (a). Notice the short-term trend (the 10 day EMA) is now moving with a slight uptrend, although all the other EMAs (b) are bearish. But money is moving into the market (c and d) and the MACD has given a buy signal (e).