Tuesday, October 25, 2011

Morning Market

The above 10-day, 5 minute chart shows prices consolidating between 119 and 123; followed by their break-out on Friday and their continued move higher yesterday.  Also note how the range high of 123 became support for the break-out.

While prices have continued their break-out, I am still concerned about the lack of volume.  While no rally is ideal -- that is, it does not have all the expected hallmarks of an upward move -- the lack of volume is concerning.

Ideally, we'd like to see prices advance, fall back to technical support (the 200 day EMA) and then continue their move higher.

Both the medium and longer term Treasury markets are hanging on to the respective "center of gravity."  We're also not seeing a massive sell-off on higher volume totals.

The above charts show that the overall risk on trade is "on."

Oil has also moved through important technical resistance areas around the 90 and 93 handle.  Also note the shorter EMAs are moving higher, with the 10 having crossed the 50 day EMA and the 20 about to do so.  Day before yesterday oil printed a very strong bar, followed by yesterday's move higher -- which moved prices through the 200 day EMA.  The dollar's recent fall does not help matters, but this move higher is also part of the overall "risk on" trade.