After the volatility of the last few weeks, trading over recent days appears very quiet. But I think it is a bit like a duck – smooth on top but paddling like hell under the water. Lots going on just out of sight.
And I am about to have two weeks away from my office and my charts. I can always count on going away at the most crucial periods in the market’s progress and just when it looks like we will start to get some signals on where it is all heading.
A very mixed bag – the SPX looks like it has formed a bullish little flag this week and needs a fifth wave up. But that would take it out of the main downtrend from the top last March. But at the same time the Russell 2000 finished very weak last night. The hourly on the RUT is getting oversold so it will need a relief rally soon. Same with the Trannies – they were very weak as well which causes me some concern about the overall market. The NASDAQ is probably the most interesting of them all at the moment so I think we might need to follow what that one does next to weigh up the overall trend.
The US dollar continues to be the problem. Against the Swissy, I just had the feeling this morning that the dollar might be forming a head and shoulders top. Needs more work. The same pattern doesn’t show up to quite the same extent on the other crosses. I usually favour analysing the dollar against the Swissy as it tends to give slightly better signals.
Gold came back and did some work in the gap it left last week. Just amazing how gold fills gaps on my cash chart. Silver unfortunately was relatively weaker so my gold/silver ratio is back under the downtrend. Need that to break out to confirm a move in precious metals.
Grains have been consolidating for the past week. Undecided whether they can have another move up. Seem to need time more than anything here.
Natural Gas looks like it needs to have a correction. It has had a big move over the past couple of months.
The biggest worry I have is copper. The indicator I run on copper that I mentioned a couple of weeks ago, has continued to deteriorate. This is not good. We need copper to start to show some positive action.
But a little bit of good news – the price of coal (Australian Thermal) has gone up three bucks in the last week. Now that really is something.
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