Gold, Oil & Indices (Equity & Bond Indices)

I keep saying the best bet in the market is for the interest rates to rise for 3 years. That said their many places where you can do that wisely and trouble free.

Time to Focus on Silver
06/18/2010 By Jordan Roy-Byrne, CMT
It is not exactly groundbreaking analysis to say that whats good for Gold is generally good for Silver. As observers of the precious metals know, Silver tends to lag Gold but eventually catch up quickly. In the long-term sense, Silver is still a year or two behind Gold as Gold has broken above all resistance levels. Technically speaking, we do favor Gold over the next few months, but ultimately, Silver is poised to catch up with vengeance.

Read more here....http://thedailygold.com/chartstechnicals/time-to-focus-on-silver/?p=3637/

Station

I have read your last few posts and they have been very informative. At times you could easily be mistaken for Ashraf .lol

Cheers

It sure would be nice if the financial situations between all he countries could be resolved, and if we could have some proper regulations on banks and the financial system to minimize fraud and manipulation. From the looks of everything we have a few years still before things get sorted out, fixed and some what stabilized.

DIA - Dow Jones Industrial Average ETF - Daily Chart

The past 12 years we have seen the DJIA go through some large bull and bear markets providing those with trading experience to generate large profits in both the bull and bear markets.

Recently we have seen the DJIA pullback and test the key pivot point and has started to bounce. Although this price action is positive I have my doubts about another bull market rally because of how the chart looks. I focus most of my analysis on chart patterns, volume and market internals. These allow me to monitor the overall heath of the market on a daily, week and monthly basis. Using these techniques I am able to pull money from the market consistently.

This year we saw some extremely heavy selling in May which could have been strong enough to shift the trend from an up trend to a down trend. I call these large volume candles Get Ready Spikes. If they are green then we are looking for higher prices but when they are red it means distribution is starting and lower prices could start to form in the coming months.

The DIA chart below looks to be forming a very large head and shoulders pattern which is currently trading near the top of the right shoulder. This pattern is very bearish and points to much lower prices in the next couple years if the major support level (neckline) is broken.


GLD - Gold Exchange Traded Fund - Daily Chart

The chart of gold shows the same cup and handle pattern which I have been talking about for a while now. Last week the price of gold made a new high breaking out of this pattern. We could see the price of gold start to work its way up to the $1400-1500 level over the next 3-6 months which calculates to $140-150 on the GLD etf.


USO - Crude Oil Fund - Daily Chart

USO oil fund has been trend down for a couple months and recently put in a nice bounce from the May low. I feel as though oil is forming a bear flag and could head lower in the coming weeks. Until it breaks the key resistance level traders must be cautious if they have any long trades right now.


Weekend Dow, Gold and Oil Trading Conclusion:

In short, Im bullish on stocks for the short term and think we could retest the April high in the next month or two. But after that the market could roll over and from there we could see much lower prices. Or we could see the indexes breakout and start another leg higher During volatile times like we are in now we must trade with caution until the overall health of the market clearly indicates the direction of stocks. Until then focusing on low risk setups and taking profits quickly is the safest trading strategy.

Gold looks to be setup for a strong move higher. I am hoping for another dip to shake out some investors before it continues its march upwards. Oil on the other hand is trading near a key resistance level. Only time will tell if it can break through and start a rally. If not then we will see the market struggle.

Asian Market Wrap: China Introduces Yuan Flexibility
The recovery and upturn of the Chinese economy has become more solid with the enhanced economic stability. It is desirable to proceed further with reform of the RMB exchange rate regime and increase the RMB exchange rate flexibility
Exact details of how this new found flexibility will manifest itself remain in question
What the papers had to say on the Chinese move
Improved risk sentiment led to sharp gaps higher on the open in the AUD in particular
The official Yuan mid-point was unchanged from Friday leading to some confusion but the Yuan has subsequently to 2-year highs against the USD
Oil traded higher on improved confidence in global growth prospects
Regional bourses rallied almost 2%
Rightmove survey of UK house prices +0.3% MoM
Greek PM says budget cuts will win over investors
Fitch ratings see no chance of EUR break-up
Fitch also says Japan PM claims of wanting to fight public debt will be tested

The USD opened quite sharply lower this morning after the weekend announcement by China that it is to allow greater flexibility for the Yuan in currency markets. Risk was generally on and this sentiment outweighed the traditional approach to Yuan moves of selling the JPY crosses and USD/JPY particularly.

AUD/USD gapped 125 pips higher on the open, trading straight through stops above .8750 and leaving many traders with up to 100 pip slippage. The market pulled back to .8750 after the Yuan mid-rate was announced at exactly the same as Friday but the AUD has again rallied as USD/CNY fell. A stronger Yuan is not necessarily a good thing for the AUD but the market has ignored this and concentrated on risk sentiment. Range: .8754/.8835 (NY close .8700)

EUR/USD took out stops above 1.2450 in early interbank trade, seeing a high of 1.2468. The Fitch and Greek statements will have generally helped the mood but we can expect to see some post-mortem enquiries in pairs like EUR/USD and EUR/CHF where there were stop-loss hunts in early thin markets. Range: 1.2369/1.2468, EUR/CHF 1.3695/1.3742

USD/JPY also took out stops in early trade, seeing a low of 90.04 in early interbank trade. The JPY crosses rallied as risk sentiment improved and USD/JPY jumped in line with them. Ranges: 90.04/95, 112.11/90

Sterling has been fairly quiet on the crosses, taking its lead from the EUR. Range: 1.4809/74

Markets: Nikkei +2%, HK +2%, Sydney +1%, Kospi +1%. Gold steady $1258/oz, Oil +1.25% $78.50/bbl.