From the Charts: Macro Week in Review/Preview September 3, 2010

This week began with the expectation of stronger prices for Gold and Oil, a continued pullback in US Treasuries and possible resolution of the uncertainty in the US Dollar Index. Volatility was falling within a range and expected to have little impact on equities, which were ready for a pop. I detailed this in the broad market trend reviewed Saturday August 30.. Through Tuesday, month end, Treasuries and Oil were bucking that analysis, heading higher and lower respectively, while Gold, the US Dollar Index and equities were behaving as expected. The new month brought an explosion to equities dragging down the US Dollar Index, and a reversal back to expectations on Treasuries and Oil. It also gave a broader perspective from the monthly charts. From the monthlies Gold, US Treasuries and the US Dollar Index looked strong with Oil testing the bottom of a range. The Volatility Index was settling within the tightening SMA’s and the Equity ETF’s are poised to move lower. Equities lower? Not what happened this week. What will next week bring? Lets look at the charts:

Gold Daily

Gold Weekly

Gold had a good run up this week and printed an inside day today near the 1255 resistance level after testing lower and regaining the 1245 support level. It probed the 1255 level 3 times this week without losing ground and looks to head higher and test the 1265 are above it. Support at 1245 has held but there is additional support at 1233 should it pullback. The channel in the weekly chart gives a resistance level above 1265 at 1328 and shows support at 1225 then 1180.

West Texas Intermediate Crude Daily

West Texas Intermediate Crude Weekly

West Texas Intermediate Crude futures also had an inside day and finished near resistance of 74.80-75.1. If it does not reach higher that than Monday’s open near 75.50 then it will continue with a lower high building a symmetrical triangle. Above 75.50 it can run higher and sees resistance at 76 and then the cluster of Simple Moving Averages (SMA’s) higher between 76.56 and 77.82. There is support on the way down at the 72 area and then 70.50. The weekly chart shows a bullish hammer for the second consecutive week, a bullish indicator if confirmed by a higher week next week. Yet all those weekly SMA’s between 75.21-77.75 will act as resistance as well. Should oil get through all those SMA’s there is room to 80 and higher. The weekly chart also shows additional support points at 71.19 and 67.72.

US Dollar Index Daily

US Dollar Index Weekly

The US Dollar Index took a beating this week falling out of its bullish flag and looks headed lower. It ended on support at 82, with 81.50 and the 80.70-81 area as support below. If 82 holds and it bounces there is resistance at 82.50 and then the 83.25-.50 area above. On the weekly chart the Dollar Index lost support at 82.25 with the next support 81.64followed by 80.46.

iShares Barclays 20+ Yr Treasury Bond Fund Daily

iShares Barclays 20+ Yr Treasury Bond Fund Weekly

After an inside day Monday my proxy for US Treasuries, TLT, printed an bearish hanging man on Tuesday and if there was any doubt confirmed it Wednesday, Thursday and Friday. Having lost the 105 area of support, it looks weak and headed to fill the gap lower to 102ish and then maybe the lower support levels of 100 and 98. Despite being lower today there is a chance for a bounce, heightened by the hollow red candle (bullish in a bearish kind of way) today. Resistance would come first at the 105 area, then 106 and 108. The weekly chart adds to the bear case printing a Bear engulfing candle, covering the last two candles.

VIX Daily

VIX Weekly

The Volatility Index ran to the bottom of the channel it has been in for the last 2 months, barely breaching it today. The lower bound of the channel 21.80 is now resistance with 23.47 and 25.52 resistance above that. There is support at 18 then 15.80 lower if it cannot hold the channel with a fingertip. The weekly chart shows support at 21.25 with 16.93 below that. Holding above 21.25 on the weekly it could see resistance at 24 then 26 and 28. Watch 21.25 as below that would add to the bull case for stocks.

SPY 60 minute

SPY Daily

SPY Weekly
The 60 minute chart for the SPY shows it breaking above a lot of the clutter between the 106 and 110.50 range. it looks good for more. Now there are only a few resistance points higher around the 112.13 area before it tests 113.20 and some clear air. On the daily chart it printed a Hanging Man today a possible bearish omen, right on top of the 100 day SMA (support) and just below the 200 day SMA (resistance). There is support lower at 109.40 and then 108.48 before the strong support at 107.10. The weekly chart shows the rally started off of support at the 104.35 area and rose through the cross of the 20wk and 50wk SMA’s. It also adds resistance higher at 114.67.

IWM Daily

IWM Weekly
IWM also had a great bull run but ended the week with a Hanging Man on support of the 200 day SMA, a possible bearish indicator. There is support lower at 63.35 and then 62.77 and 61.87 below. It looks to rise however and test resistance at 65.24 and then maybe 66.50. The weekly chart shows a big bullish candle stopping right at the cross of the 20 week and 200week SMA’s near 64.50. This all happens within a flag so the certainty of a further rise is suspect. There is resistance higher at 65 and then 67.50. It also shows additional support at 60.5 and then 58.68.

QQQQ Daily

QQQQ Weekly

The bull move in the QQQQ is the strongest of the equity index ETF’s. There is no Hanging Man creating uncertainty, but rather a Three Advancing White Soldiers pattern that is very bullish. It stopped it s run today near resistance of the 100 day SMA. There is resistance higher at 46.25 followed by the 47 area. Support on a pullback comes first at the 200 day SMA and then the 45.00 to 45.25 area. The weekly chart adds to the bull case printing a Bullish engulfing candle that drove through both the 20 week and the 50 week SMA’s which will now act as support. the weekly adds resistance higher at 48, and support points lower at 44 followed by 42.46.

So next week looks to bring stronger prices for Gold again. The US Dollar Index and US Treasury Bonds look to continue their moves lower. Oil is set up for a move higher but does not have much room before it runs into a wall of resistance. And falling volatility index combined will create the environment for stocks to push higher. Enjoy your Labor Day Weekend and Good luck next week!

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

From the Charts: Macro Week in Review/Preview 8/7/2010

The week began looking to bring stronger prices for Gold and Oil. The US Dollar Index looked to be headed to the woodshed for a further beating and US Treasury Bonds might drift to the top of their range. Less volatility in the volatility index and a weaker dollar looked to make it easier for stocks to rise and test their 100 day SMA’s (last week’s summary/preview). Equities did test the 100 day SMA but could not meaningfully pierce it despite the VIX heading lower. Gold did rise and the dollar did continue to get beat up. Oil and bonds were a little more quirky but behaved broadly as anticipated. Let’s look at the details:

Gold Daily

Gold Weekly

Gold pierced the 100SMA on Tuesday then never looked back pushing through the 20 SMA and touching the 50SMA Friday at 1211 before a slight pullback. 1211 will continue to be resistance, with 1241 a big resistance area above that. 1200 will act as support with the 20/100SMA area at 1189 further support below that. The weekly chart confirms the direction is higher now, adding a resistance point at 1225, and showing some support at 1192 then 1175.

West Texas Intermediate Crude Daily

West Texas Intermediate Crude Weekly


Oil broke out of the box Monday with a strong move up and initial test of 82, the top of the 76-82 range it has been in. After pushing through on Tuesday it could not hold 82 as support through Friday and fell back into the range. 82 will continue to act as resistance, with 79.50 and then all SMA as support lower, until the bottom of the 76-82 channel. The weekly chart shows the short term direction is higher, as it held above the weekly SMA’s and rose this week. Support in the weekly chart comes at 79.50 then 20/200/50 week SMA’s between 76.76 and 78.25. Resistance shows up at 85 then 87.50. Expect another test of the 82 channel top.

US Dollar Index Daily

US Dollar Index Weekly

The chart for the US Dollar Index looked ugly Monday and just kept getting worse. Friday saw it lose the 200 day SMA and hoping for support at 80 from April or the stronger 79.50 area. This 79.50-80 area is the key to future direction, but it looks lower still. If this area holds, resistance comes first at 80.68 then 81 and 81.50. The weekly chart shows it is holding onto support at the 50/200 week SMA cross near 80. The 79.50 support area from February through April would give way to 78 as support lower and then 77.

iShares Barclays 20+ Yr Treasury Bond Fund Daily

iShares Barclays 20+ Yr Treasury Bond Fund Weekly

The long bond ETF tested 100 immediately on Monday, consolidated throughout the week then retested the 100 area on Friday. This week confirmed the importance of the 50 day SMA as support, currently at 98.46. Moving to the weekly chart more clearly confirms that TLT is in a range between 98.50 and 102. Expect this continue near term.

VIX Daily

VIX Weekly

The Volatility Index, VIX, printed a series of bearish engulfing candles, where the body of today’s candle completely covers body of he previous day’s candle, this week which bodes for lower levels to come. It is still elevated by historical standards. The weekly chart shows the trend down more prominently. Support comes at 20 and then 18 below that, with resistance first at 22, and 23.40 and 25.

SPY Hourly

SPY Daily

SPY Weekly

The hourly chart for SPY shows the tone of the market for the past week: wait and see what happens with the Friday employment report. The energy created by the tight trading range Monday through Thursday between 111.75 and 113 was then released on Friday with a downside test of the 200 day SMA at 110.93 before rising back to close in the range on strong volume. The importance of the 200 day SMA as support was confirmed otherwise a whole lot of action yielding nothing, unless you area a day trader. This is reflected in the daily chart and summed up in one word, indecision. On the daily chart the 200 day SMA is support at 110.93 with 110.20 below that. Resistance is first at 113.20, the mid-June high. The weekly chart points to a positive future. On the weekly it broke and held the 20wk SMA at 111.85, and sees resistance at 113.20 and then 114.67, with support lower at 109.38.

IWM Daily

IWM Weekly

IWM showed the same pattern of a tight trading range Monday through Thursday but did not respond as well to the downside energy release Friday, failing to re-enter the range. It did confirm the 200 day SMA as strong support as it held 63.85 then rose and held 65. Still, 66.63 the 100 day SMA is resistance, so a range between the 100 day SMA and 200 day SMA exists causing some indecision on the next direction. Again the weekly chart looks more positive. IWM probed above the 20wk SMA at 66.29 but could not hold it. Another push will see resistance higher at 67.50 and 64.68 acting as support lower with 62.86 below.

QQQQ Daily

QQQQ Weekly

The Q’s were the strongest of the index ETF’s this week. After the same tight trading range Monday through Thursday it retook, and held above the 100 day SMA at 46.68. Resistance higher is at 47 then 47.80 with support below the 100 day SMA at 45.75. Still a pretty tight range with some indecision about the next direction. On the weekly chart QQQQ rose above the 20 week SMA at 46.46 and held. It also looks more positive on the weekly timeframe. Resistance comes at 47.80 and support at 45.90 then 44.71 from the weekly charts.

So going into next week Gold looks to be going higher, and Oil despite ending the week weaker is showing strength as well. The US Dollar Index needs life support and hopes to get it in the 79.50 to 80 range, and bonds remain in a range. The major equity index ETF’s SPY, IWM and QQQQ all are showing indecision shorter term but are pointing higher on the weekly charts, near the 100 day SMA as resistance. With the volatility index looking lower, perhaps they can punch through.

There will be no Top 10 Trade Ideas put out this weekend due to my vacation, but it will return next week. I will be reviewing the sector SPDRs Sunday night and getting back into the individual names starting Monday. Have a great week trading!

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

From the Charts: Macro Week in Review/Preview 7-2-2010

Can you remember back to last Friday? We closed the week with a bunch of bearish engulfing candles on the weekly index charts, gold and oil looking toppy and the dollar looking for a bottom. The daily charts showed down moves finding or searching for support, gold basing for a move higher and oil and the dollar in ranges. Monday came and it seemed like all indicators were basing. Then came Tuesday and everything started to breakdown. I gave a preview of that Tuesday night with some key indicators on the monthly charts which all looked ugly. Then the cliff dive. Let’s look at the details:

Gold Daily

Gold Weekly

Gold was in a range and then fell off the cliff after quarter end. It came back today but stopped short of the 50SMA. Still looks week on the daily with support around 1167. Turning to the weekly it seems gold is ready to test the bottom of the channel near 1184 at the very least. Looks like some downside.

Oil Daily

Oil Weekly

Both the daily and the weekly charts show Oil looking lower and testing the 70 – 71 area. Resistance above is first at 74.50 then 76 -78 from the weekly. Additionally on the weekly oli retested the lower bound of the wedge and failed. Seems like a lower range.

US Dollar Index Daily

US Dollar Index Weekly

The Dollar Index printed an inverted hammer signaling a potential reversal, but wait for confirmation. If it moves up resistance is at 85.46. The weekly shows why you should wait on confirmation. It had an inverted hammer last week which failed this week and looks lower to 83.16. So which way? The weekly takes precedence so look for lower first.

VIX Daily

VIX Weekly

The daily VIX chart showed support today at 30, still at an elevated level. Looking at the weekly, shows that 28.25 is a key level of support. it is off of its recent highs but still a higher base.

SPY Daily

SPY Weekly

The SPY daily chart looks weak flagging after the fall this week near support at 102.46. Below that support is at 100.55 and resistance at 104.15 – 104.38 area. The weekly shows nearly the same resistance at 104.50 but additional support at 101.50 before 99.50. This is going lower.

IWM Daily

IWM Weekly

The daily chart for IWM shows a breakdown out of the box and a search for support. It is going lower. It looks like it will find it at 58.40 first then 56.50 with resistance above at 61.30. The weekly chart has nearly identical support (58.47, then 56.48) and resistance higher at 62.25. Also going lower.

QQQQ Daily

QQQQ Weekly

The QQQQ daily chart is trying to hammer its way back higher from the 42.50 support level, same support as in February, with support below that at 40.60, and resistance above at 43.50. This weekly chart also shows the same support as daily, 42.50 then 40.71. Resistance on the weekly is slightly higher at 44.10. Not quite a triple but if the QQQQ’s lose the 42.50 area I would not be surprised.

Percent of Stocks In S&P 500 Below Their 200Day SMA

I like to look at this chart occasionally as it shows some insights not on the price charts. Still a long way to go before the levels leading to the March lows, but getting interesting.

That is it for the week. Looks like a continued downtrend to me in almost everything. I will post some individual names this weekend and Top 10 Ideas Sunday. Have a great weekend!

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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