Here is a daily chart of the S&P500. After the May flash crash, the index has had a hard time holding the 200 MA. What has happened is sideways action until a break down. The top around June 16th-19th is an example and the top starting August 2nd. A series of DOJI candles form then a breakdown. Our current action is very similar, we had traded sideways for 5 days. The MACD shows a slowing of momentum. The real question is, will the pull back slice through the 20 /50 MA and continue to new lows or will this pull back just be the start of forming higher lows and higher highs. The FED meets I believe the 21st to discuss their next course of actions. A rumor was QE2 will be announced then however, unless the markets are falling QE2 I don't think would be justified as it would put more pressure on the bond market.
Friday Gold continue to make new highs.
On Friday the 1280 mark was breached. So a 1300 gold close over the next 2 weeks is not out of the realm of possibilities. I still do believe there is a pull back in the works, but with growing uncertainty and possibility of QE2 looming, gold has continued to be bullish. The MACD has a larger positive tick on the histogram so momentum is continuing up.
As always, the next week will be quite interesting. I was let down by quadruple witching week last week. The volatility was not as intense as I expected.
Check out this article on how the ECB on Friday intervened in Ireland's bond market
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