Tuesday, February 21, 2012

Morning Market Analysis

Let me start with copper, as this is an industrial metal (an are of the market that concerns me right now).  Copper dropped over 2.5% yesterday, and is now below the 200 day EMA.  The shorter EMAs are moving lower and the only EMA that can be used for technical support is the 50 day EMA.  Also note the increase volume over the last two days as prices have fallen.

After gapping higher at the open yesterday, we see that prices moved lower, eventually coalescing around levels established on Friday.  The lack of follow through to the opening pop is not a good development.

On the positive side, we have the technology sector (XLKs) which are in the middle of a very strong uptrend.  The EMAs are bullishly aligned, all are moving higher, the underlying technicals are strong.

The financial sector is still moving higher as well, although it has broken the trend started in late December.  Momentum is also weaker as well, but the volume indicators are still positive.

The consumer discretionary sector is still moving higher as well, although the MACDs position is a bit troubling.

Grains are still hitting resistance at prices established in late October, along with important Fibonacci levels.