S&P in blue. Interest rates in black. Notice an unusual gap growing here?
Slope of Hope Blog Posts
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The pattern in Silver Wheaton (SLW that emerges off of last April's peak at 47.60 argues strongly that a complex intermediate-term correction ended at the Oct 4 low of 25.84, a decline of 46%. That was followed by a powerful new up-leg that within the past week has hurdled key resistance at 37.35/40.
From a pattern perspective, we can make the case that the current up-leg off of the Dec 29 low at 26.85 represents the "right side" of a big "W" — or Double Bottom formation that was putting intense upward pressure on 37.35/40 on the way to my next optimal target zone of 42.30/60 and then to 44.00/30.
At this juncture, only a decline that breaks back beneath the Apr-Feb resistance line at 38.16 will compromise the current upside breakout and thrust towards 42.50.
Looking at gold, the SPDR Gold Shares (GLD) is heading for a confrontation with its prior significant rally peak at 175.46 (from Nov 8), which if hurdled and sustained should trigger upside follow-through to 182.75-183 relatively quickly.
Only a decline that breaks 171.50 will compromise the current upside acceleration phase.
Originally published on MPTrader.com.
Below are a series of 2-Year Daily charts. I'll be comparing the current levels of the Emerging Markets ETF (EEM) with those of the BRIC countries for the purpose of determining relative strength of each.
The first chart is of the EEM. Price is currently in a trading range just below major resistance established in the first half of 2011 and just above major support established in the second half. There are negative divergences on the RSI, MACD, and ROC indicators, as well as declining volumes. Price is still subject to the influences of the existing bearish 50/200 sma Death Cross formation, and will be until such time as price breaks and holds convincingly above major resistance, and the moving averages cross to form a bullish Golden Cross pattern.
Data released this morning shows that Durable and Core Durable Goods Orders dropped considerably…down to 2009 levels, as shown on the graphs below.
Ones to watch for possible continuing weakness as a confirmation of slowing global growth in 2012. In the short term, this may take some of the steam out of the current equity market rally, as the futures markets dropped immediately following the release. In this regard, I've outlined where short-term support lies for the four e-mini futures indices (YM, ES, NQ & TF) in my post of February 27th.
The dip buyers had yet another great day yesterday as the large opening gap down was swiftly converted into a new high on SPX since the March 2009 low. That new high isn't a break with confidence of very strong 1370 area resistance yet, but if it does break with confidence then that opens up targets in the 1400 to 1440 area as you can see on the 6yr daily chart. My preferred trendline target would then be possible channel resistance in the 1410-20 area, with my reserve target being the 2008 high at 1440.24.
There is one other thing well worth noting from the chart below. Major tops on SPX are generally preceded by a sizable counter-trend spike that sets up either a head and shoulders pattern, or a double-top or bottom. We have seen no such counter-trend spike for quite a while now, and it's unlikely that we would see a major top without one. That counter-trend spike would generally precede the high for the year by a couple of months:
Further to my post of February 11th, the YM, ES & NQ have advanced above the minor support levels that they had formed just before the latest unemployment data was released during pre-market hours on February 3rd. These e-mini futures indices rallied strongly (on high volumes normally seen during market hours, not during the pre-market session) immediately after that data was released before cash markets opened.
The TF also rallied on higher than normal pre-market volumes, but it has failed to advance above pre-market highs set that day.