Monday 27 April 2009-04-27 G’day Guys. Bit of a rush job this morning, so no charts, but hopefully explained okay so ya can see what I’m talking about on charts of yer own.
Well the American session on Friday was pretty darned volatile, although stocks leapt from the starting gate and took of at a mild canter, there were a couple of very strong collapses along the way, which do not bode well.
Of course I don’t know much but when four hours of gains are pretty much wiped out in 30 minutes to be regained again in 1 hour and a half, and then be three quarters wiped out once more…. Mmmmm I begin to feel a little less than confident of protracted upside.
Note though these are just feelings. One should be somwhatr careful of trading on “Feelings” .
Of one thing I am certain though, there is uncertainty in the markets. LOL!
Now for some hard core observations.
GOLD Firstly and note worthy is that gold over the US session actually made gains.
Also of note is that gold tended to follow the US index moves, although weakly, rather than move opposite.
Of interest is that on the hourly, divergence in the MACD hitograms is showing and appears to be confirming in the MACD moving averages.
On the daily chart, gold could be seen to be in a downward sloping channel, with price nearing the top of that channel as we speak.
Balancing that is the “double bottom and failure to hit the bottom of that channel in the second hit. This “double bottom occurred over April.
MACD MAVs and stochastic signals for the second hit of the double bottom suggest it is strong.
If so expect channel breakout and a test of the 970 level, and possibly a retest of highs.
CURRENCIES (paper)
Most major currency pairs are showing weakness against the USD at the start of trading this morning and this initial direction has an appearance that it may continue for an hour or two at least. Tis prolly a bit early to be calling it though, and how our Asian indices react today will be telling.
The AUDUSD recent rise (Friday and weekend) has been divergent with the MACD Histograms and Mavs and suggests that .7160 will be tested to the downside. XJO Weekly A 3 wave corrective structure (bullish) that occurred from January through to march has now been “technically satisfied”. That is Price has regained the level from where the 3 wave corrective structure began. This does not mean that all upside has finished, but is an indication that downside could be on the cards soonish on the Weekly. The Stochastic is high in the overbought region and has ticked down, but as this is the first venture into the overbought region for 10 months, there is no reason that should immediately plunge.
Also of note is on Price on the weekly we have tested the 13MA and bounced.The good old 13 MA often acts as moving resistance on smaller timespans.
However I would also like to note here that price on the weekly has broken above the 21MA and run a little for the first time in 10 months… on smaller time spans the first break and run above the 21 MA often fails, or at least price comes back to test the 21MA, which is currently around the 3550 level.
Weekly suggests to me we could go either way here.
Daily The run from late march on the daily when Price did its first bounce from the 13MAhas been choppy and corrective, suggesting this run may not be sustainable on this time frame.
From Late March again, divergence is showing in the MACD Histograms, and could be starting to show in the MACD Mavs as well. Should price fall, the downside target based on the Histograms is around 3540.
If a trend line is run from the midmarch low, connecting all the daily lows ‘til now, one can see the trendline has been tested heavily in the last three days, and rejected to the upside. This has also occurred at the first major test of the 21MA on the daily, which resulted in a pierce, and rejection, not a convincing bounce but a rejection nevertheless..
Not the Stochastic has hooked up at around the midway level.
Daily suggests to me more upside but weakening.
Hourly Firstly, the run down from the 17th of March through to the 21st shows divergence on the MACD Histo grams and Moving Averages.
Tentative upside targets, based on the MICD Histograms gives a range between 3795 and 3815.
We have not yet met the lower of this range.
The recent approach to these levels has been divergent on the MACD from a level around 3715.
From the daily then, we have room for more upside, but the approach to upside suggests that once achieved it may well prove to be a point of rejection and potential concerted (days) downside may ensue.
Price is currently bouncing around the 13ma (based on cash close figures ie during the US session) the stochastic has just moved down from overbought and suggests short term downside (hours)… caution regarding downside here though, as I am working from current movements, these occurred during Cash close and signals can be weak as a result. Action after cash open will confirm.
5 Minute Again as stated above for the hourly, there is caution required as signals over cash close are not as reliable as during cash open.
Divergence as shown on the hourly (MACD Histos and Mavs) is quite visible with a downside target for 3714 being available.
Price is solidly under the 21ma and this could suggest further downside for the next day is available, however, caution as the two dips beneath the 21 ma on the five minute are showing divergence in both the Stoch and MACD Mavs, that is although price went lower on the second dip, both the stochastic and the MACD Mavs registered this as a higher low, suggesting that upside is not ruled out.
In conclusion… Uncertainty Roolz.
Personally I would suggest that we have more upside to go, but that the run up is weakening.
I believe we might be in for some choppiness as suggested by a couple of wise heads here.
‘Twould be a day trading dream… but I’ve gots a day job to attend to.
(20min delay)