Tuesday, December 7, 2010

Prices had an early morning rally (a), followed by a quick reversal bounded by two trend lines (b and c). This was followed by a grinding rally for most of the rest of the day (d). However, there was a strong sell-off at the end of trading (e).

Notice that prices are right at important resistance levels (a). However, yesterday prices did not make any upward progress.

Prices gapped higher at the open. But as is typical with that development, the MACD (d) indicated that all the momentum occurred at that one move (d). Prices moved down to the 50% retracement level (b) but rallied for the rest of the day (c).

The overall trend in the Treasury market is still lower (a), with prices forming a downward sloping pennant pattern. Also note the very bearish EMA picture -- all are moving lower, the shorter are below the longer and prices are below all of the EMAs.

Oil has overcome the technical resistance it encountered in the lower 80s (A). Prices have twice advanced strongly beyond this level (B and C). Notice that prices are now at important technical levels (C). Also note the MACD (D) has given a buy signal. At some point, oil can become a problem for the economy.

Gold has three trends. First, there is the strong uptrend (A) of prices followed by a triangle consolidation that moves sideways (B). This is followed by a strong upside breakout (C). Also note the MACD has given a buy signal (D).