Tuesday, August 24, 2010

Yesterday's Market

Click for a bigger chart.

Prices gapped higher at the open (b), but hit resistance 108.5 and reversed, rallying into the 10 minute EMA (d) before hitting support t a low established last week (e and e). Prices twice tried to rally through the EMAs but couldn't get much beyond (f and g), so they sold off at the end of trading (h) on increasing volume.

In the last 8 days, we've had four gaps lower (a, b, d and e) and one gap higher (c). Also note that after the gap higher, prices hit resistance at the 200 day EMA which they could not get beyond.

In other words, the overall tone of the market is bearish right now.

One of the things I find really interesting is how the oil market has been stuck in a range for the last few months. Notice that after breaking through the $80/bbl area (a), prices fell back just as quickly (b), printing some very strong downward sloping bars. Now the EMAs are bearish with the shorter EMAs below the longer EMAs and prices below the EMAs pulling the EMAs lower. Also note the MACD has given a sell signal and momentum is clearly leaving the market.

Corn has risen in sympathy with the wheat market. Prices have moved through key resistance levels (a), but have upside resistance with line (b). Also note the EMAs are rising and there is a fair amount of space between them. There is also plenty of momentum (d), and a bit of upside left.

Soy beans -- which had been rising with wheat -- have broken their uptrend (a) and have printed some strong lower bars (b). While the longer EMAs are still rising, the shorter EMAs (the 10 day EMA) has turned lower, and the MACD has given a signal (d).

Cotton is still in a strong uptrend (a) which has consolidated gains (b) during the rally. Also note the strong EMA picture (c) although the MACD is close to giving a sell signal.