Tuesday, November 30, 2010

Yesterday's Market

The dollar's rebound has been the most important story over the last few weeks, which illustrates that the dollar is still a safe haven in troubled times. Yesterday's price analysis is still solid: the shorter EMAs are moving higher (a) and we have two price targets: the 61.8% Fibonacci level (b) and the 200 day EMA (c). I've added the underlying technicals to show the strength of the rally. New money is clearly flowing into the market (d and e) and there is clear upward momentum (f).

Over the last five days, we've seen a strong rally with several gaps higher (a, b, and c).

Yesterday, the market gapped lower at the open (a), but then traded sideways for most of the day, consolidating losses (b). Prices broke out of this range near the close (c), rallied, but found resistance near the previous days close (d).

On the oil chart, notice that the mid 80s area (A) is still a key price area. Prices moved through this area strongly a bit ago (B), but moved back through the area just as quickly. Now prices are making strong moves through this area again (C). The key question is will the rally stick?

Corn is still in a strong uptrend (A), although prices have recently fallen (b) to that trend for support. Also notice the EMA picture now: the 10 has moved below the 20 and the 10, 20 and 50 are all moving more or less sideways. Also note that momentum has decreased (d), although it too is moving sideways right now.

Gold is an interesting chart. First, it has clearly broken its primary uprtrend (a). However are prices forming a head and shoulders topping pattern (s, h, s) or are the forming a triangle consolidation (lines b and c)? The EMAs aren't offering much help, as the 10 and 20 day EMAs are close together and moving sideways and the 50 day EMA is moving higher, albeit at a low angle.