Friday, May 4, 2012

Morning Market Analysis

Despite breaking the long-term trend line earlier this year, gold prices are still finding support at the 50 week EMA.  But, momentum is still weakening and money flowing into the market is weak.

The gold ETF is trading at the 50% Fib level established from the rally of January 1 - Feb 29.  A move below the 157.5 area would make the January 1 level the natural, short-term price target.

The equity markets are still in a constrained position.  The IWMs and SPYs are trading in a range, (78-84 and 136-142.5, respectively), while the QQQs are below late February/early March levels.  Most importantly, on all three charts we see declining momentum over the last few months, which is not positive going forward.

Despite the recent 50 BP rate cut, the Australian market is still trading in a pretty tight range.  Prices have moved lower, finding support at the 10 day EMA, but momentum is pretty weak, and the volume indicators aren't showing much pop.