Thursday, September 8, 2011

Morning Market Round-Up

Gold is looking like it wants to consolidate at these levels.  After hitting a bit above 184, prices dropped lower on strong volume, printing very strong bars.  Prices again rallied, but notice the weakness of the rally -- prices moved sideways for two days printing a spinning top and hanging man candle before vaulting higher to previous levels, and then selling off again.  I've drawn the fib levels and a few lower levels as possible support areas.  I'd call support at 175 (previous low and 10 day EMA) and 170 (Fib level).

The daily chart clearly shows a major trend break. 

The 10 day SPYs show consolidation between the 114.5 and 123.5 levels.  The last two days have seen some strong advances; Tuesday's rally lasted nearly the entire day and ended on a high note, while yesterday saw prices gap higher and then rally into the close -- with a nice volume spike at the end of trading.  However, price need to advance through the 123.5 level for these rallies to amount to something in the long term.

Finally, consider the following Treasury market charts, going from the shorter to the longer ends of the curve.

The farther you go on the curve, the more of a bump we've seen over the last few trading days.  But even this far out, real yields are negative, which appears to be constraining traders from sending the market higher.