Archive for the price chart Category
Gold futures (trading symbol = GC); Daily bars (Click on chart for larger image)
The technical indicators shown on the chart are of my own proprietary design. My conclusion is based on my interpretation of those indicators, Elliott Wave analysis, support/resistance and trend-channel analysis, and the strength of the uptrend in Gold.
For the past two weeks, I have stressed that oil, gold, and the dollar were reaching significant Point & Figure targets. It turned out that these projections were only off by a fraction. Here were the projections, the actual price reached, and Friday’s closes.
Oil (WTIC) Gold (GLD) Dollar Projections 115 153-154 74 (P&F counts) 154-156 Reversal price: 114.88 (5/2) 153.61 (5/2) 72.69 (5/4) Price on 5/6 97.33 (lo 94.77) 145.30 (lo 143.47) 74.92 (hi 74.93)
I also had a target of 1370 for the SPX. The high on 5/2 was 170.58, before the correction started. So far, the low for the decline has been 1329.17, and it closed the week at 1340.20.
I am supplying these figures for a couple of reasons: first, to illustrate the immense value of using P&F analysis, and second, to show that these wild price swings may indicate that the stock market is at an important juncture.
Based on the accumulation pattern that was created during the correction into mid-March, there are higher potential P&F targets for the SPX. Also, that correction formed a H&S configuration which has been validated by a clear break-out above the neck line. The normal projection for this H&S pattern closely matches the more liberal count taken across the P&F base.
The pull-back which occurred last week could simply be a deeper than normal return to the H&S neck line. However, the severe corrections in commodities suggest that this is more than a minor consolidation, and it creates some doubt about the ability of the SPX to reach its higher targets.
By the same token, we will see that sentiment is still not suggesting that we are at an important top. This leaves us with a greater than normal challenge to determine the future course of the market. Let’s turn to the charts and see if we can derive some technical clues which will clarify its current position.
Downtrend and down momentum still intact, but approaching key support levels and approaching “oversold” conditions at the same time. Will support hold? Or is the correct interpretation “strongly trending down” instead of “oversold”? If support does not hold, a severe crash in the value of the USD relative to other major currencies is a distinct possibility. If support does hold, the USD could start a major uptrend. The next several quarters will tell the tale.
From Planet Yelnick:
China made a bold currency move Wednesday, and it barely registered in the West: it is encouraging the Yuan to be a reserve currency, to be used to settle transactions in and out of China, instead of the Dollar. For all those pundits and politicians pressuring China to float their currency, they just got their wish.
The Fed has become the biggest buyer of Treasuries, which has worried Bill Gross to ask the question: who buys Treasuries when the Fed exits?