Thursday, February 9, 2012

Morning Market Analysis

I wanted to start with the copper chart, because its advance was one of the reasons I turned bullish.  After rising above the 200 day EMA, prices have consolidated above that line, between roughly 48.5 and 50.5.  The majority of the chart is bullish, with the exception of the MACD, which is bordering on giving a sell signal (but hasn't given one yet). 

Oil is still in a downward sloping channel, although prices are now are the upper trend line.  Momentum is weak and the shorter EMAs are moving lower.  What's interesting is the MACD has been declining since late November/early December.  However, the longer term trend (the 200 day EMA) is rising, indicating the recent price action is a temporary move.

On oil's weekly chart, notice that prices are right at 61.2% Fib level.  Once they get over that, there is plenty of room to move.  However, prices have had a tremendous amount of trouble getting over the 100 level since the end of last year.

The Russell 2000 is still in an uptrend.  After gapping higher four days ago, prices have moved sideways, consolidating gains.  We have resistance at the 83.50 level and support at the 81.50 level.

The daily chart shows the consolidation in more detail.  Prices have formed three spinning tops in a row.  As this is the more risk oriented market average, it's very important to keep an eye on its movements.

The Australian dollar is in a strong rally that started mid-December.  Prices have now moved through level established in late October.  As Australia is a resource based economy with strong export relationships with China, this move tells us that traders are banking on China recovering from its "slowdown."