The daily chart shows the W pattern bottom a very powerful bullish pattern. The strength can be measured by how far the W is under the 50 and 200-day MA's. The W formed almost completely under so it had juice, and the 84 bottom and 90 breakout targeted 96 which was easily achieved and the extra juice took it to 97-98. The red lines show the sideways channel in place through 95-98 and negative divergence creating the malaise right now that should roll over into more negativity. The important 95.50 support was highlighted last week and if you recall, last Friday price was playing around at 95.50. An island reversal would occur if price drops from 95.50 to 95.00 and lower, through the gap. The loss of the 95.00-95.50 support will take price to 93 support.
Projection is for oil to pull back in here to honor the sideways triangle pattern on the weekly chart. The negative divergence on the daily chart should create weakness moving forward. A move to, and failure at, 95.00-95.50 is anticipated. Down oil means down equity markets. Up oil means up equity markets. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 2/15/13 at 11:17 AM: Crude oil sits at 95.50, dropping from 97 earlier this morning to under 95.50, now recovering to 95.50. The critical test of 95.00-95.50 support continues. The next few days for oil are critical.
how are you doing today KS - ;) ERY - LOL what day maximum pain in Gold
ReplyDeleteHello MCAP. ERY finally receives the positive divergence launch. Time will tell if this is the head for an inverted H&S and the trek back up to 7, 8 and higher begins. Charts say yes but central bankers say no. Gold is very interesting. Once folks heard that Soros is decreasing and selling out of gold, that is creating the negativity. Perhaps the longer tern descending triangle vibe, that was negated last summer without failing at the 1575 base line, may come into play again with a battle next week at 1575. The 80/20 rule says 2's lead to 8's so the breach of 1620 should lead to 1580, so there is lots of excitement ahead. Russia is buying a lot of gold these days, the most in the world.
ReplyDeleteshakeout, fakeout, breakout - we are not going to be trading Gold or Oil now until we are comforatable with the market as it defines itself. Soon hopefully we will get 100 handle move in ES I'm looking forward to that if happens your market analysis is spot on with the SP. Hard show though do you see JO up and Coffee down breaking correlation don't know why that is perhaps options expiration that's either going to tank at the end of the day or coffee will rise into the pit close. I think the market makers know what's going on in the pits so that ETN's / ETF's will often front run futures prices so I have noticed anyways. But I have also noticed them hold up the price like in UVXY only to drop the bids at the close to level off the elevated prices. It's a great study all and all.
DeleteInteresting stuff. In reference to JO and reference to the underlying coffee, it would be interesting to see if that type of behavior occurred last year with UNG and natty gas, or BOIL and natty gas. The behavior may simply indicate that coffee is at an inflection point now so some mixed signals are being thrown out as price oscillates and begins to change trend. JO charts continue to look good, positive divergence all around but the pesky 80/20 rule may want to see 28. The 30.20 level would be important and the guess is it will hold. Interestingly, on the top side price went thru 78 but stalled at 80, not fulfilling the 80/20 rule up there since a close above 82 would be anticipated. Maybe 30-80 is JO's territory.
ReplyDeleteFrom what we noticed like when you trade futures spreads the spread will come back in line to the correlation as been established by time in a reversion to the mean if you will if i remember correctly JO got spanked down so i would say that JO got pinned like a few other names i follow today just to hold price point for opex... lots of things can happen like that the outlier events in HLF today in the last 3 minutes we got Puts for 15 cents which closed at 35 as the stock dropped through
Deletegreat chart KS! will be interesting to see what oil will do, and of course if prices at the pump will follow suit (they tend to go up like a rocket and drop like feather...)
ReplyDeleteMarket is coming down... Euro topped dollar bottomed .. market will droop next week,,,, oil will be sold big time... only thing that will save oil is conflict in the middle east.
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