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Just about any and every way I look at my spot gold and the SPDR Gold Shares (GLD) work, I conclude that both have unfinished business on the downside.
In terms of the GLD, all of the action off of the Sep 26 low at 154.19 represents a bearish consolidation-rest period, which when complete should resolve itself in a resumption of weakness that projects towards a test of its 200 DMA's in the vicinity of 150.00. After that I am expecting a powerful upside reversal.
Many of the traders and portfolio managers that I speak to are looking at the beleaguered commodity and industrial materials sectors as ripe for reentry on the long side. They're watching companies like Freeport-McMoRan Copper & Gold (FCX), U.S. Steel (X), Alcoa (AA), Walter Energy (WLT), Mosaic (MOS), Deere (DE), and Caterpillar (CAT), for example. However, my enclosed monthly chart of the China Shanghai Composite gives me pause about such a committment right at this time.
A look at the pattern developing in Amazon (AMZN), which is one of my indicators for the QQQ and the QID. My near- and intermediate-term pattern and momentum work is warning me that AMZN is in the midst of a significant correction that projects into the 210-205 area prior to completion.
Today's reversal from 234.50 represented the end of an intervening rally that separates two corrective declines. As long as 234.50 is not hurdled, rallies in AMZN should prove to be headfakes prior to the completion of its correction from the Sep 20 high at 244.30 to the next optimal target of 210-205.
Originally published on MPTrader.com.
Originally published on TheTechTrader.com.
As of this moment, my optimal scenario for the nearby NYMEX oil price calls for a period of stability and/or a recovery rally that grinds into the 80.50-82.00 resistance area prior to another downside pivot that presses the price structure to new lows beneath 75.71 on the way to 70.00-65.00 thereafter.
At the risk of missing such a downleg in the absence of the anticipated recovery bounce, I will watch from the sidelines for a while longer prior to deciding if I should commit funds to a short position — in the ProShares UltraShort DJ-UBS Crude Oil (SCO) — into NYMEX price weakness (though always a hazardous strategy to short oil into weakness).
That said, only a rally that sustains above 82.00 will neutralize the imminent threat of another plunge in oil prices and the U.S. Oil Fund ETF (USO).
Originally published on MPTrader.com.
