I will be on vacation until July 10th beginning tomorrow. I wish all of you a safe and happy 4th of July holiday. My wife and I will be celebrating our 27th year of marriage next week. How she has managed to maintain her sanity is beyond me!
One last note before I go. I was just looking at some charts and I wanted to let you know about a very interesting situation that is happening in the Copper market. The daily chart was showing signs of a "bear flag" formation, until today. The overnight action in Copper has allowed the SEP COPPER contract to break out of the "flag" formation. If the market is able to hold on to these gains today this could be a very good sign that the lows are in and higher prices are likely. I won't be surprised to see Copper substantially higher when I return from vacation.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Friday, June 30, 2006
A followup to my June 27th post on the DOW.
I was rather surprised at the market's strong reaction to the FED's rate hike yesterday and so I thought I'd do some more work on the technicals as they apply to the DOW futures. Here's what I came up with.
A very interesting scenario has developed in the DOW. The market's big rally yesterday took the DOW futures right up to key resistance at the 100-day MA (11,268). If I happened to be bearish on the long-term prospects for stocks I would consider this to be a perfect opportunity to SELL the DOW futures using a very tight stop above the 50-day MA of 11,289 (on a closing basis only). If the market clears that level (11,289) then I'd have to reconsider my position as this would be very bullish for the markets near-term prospects.
Enjoy your 4th of July holiday!
Dale F. Doelling
Chief Market Technician
Trends In Commodities
A very interesting scenario has developed in the DOW. The market's big rally yesterday took the DOW futures right up to key resistance at the 100-day MA (11,268). If I happened to be bearish on the long-term prospects for stocks I would consider this to be a perfect opportunity to SELL the DOW futures using a very tight stop above the 50-day MA of 11,289 (on a closing basis only). If the market clears that level (11,289) then I'd have to reconsider my position as this would be very bullish for the markets near-term prospects.
Enjoy your 4th of July holiday!
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Thursday, June 29, 2006
Post FED comments
These are additional comments that were emailed to Polya Lesova, Financial Writer at Marketwatch.com, immediately after the FOMC announcement on interest rates.
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With the Dollar going into a virtual freefall since the FED announcement, it will be interesting to see just how far Gold can rally. If Tuesday's high of 599 gets taken out there's a decent chance that the rally can continue right up to major resistance at 609.40 which is the 100-day MA. If Gold is going to test that resistance level it will take some serious fund buying along with continued Dollar weakness which just hasn't been evident of late.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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With the Dollar going into a virtual freefall since the FED announcement, it will be interesting to see just how far Gold can rally. If Tuesday's high of 599 gets taken out there's a decent chance that the rally can continue right up to major resistance at 609.40 which is the 100-day MA. If Gold is going to test that resistance level it will take some serious fund buying along with continued Dollar weakness which just hasn't been evident of late.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Pre-FED announcement commets
The following comments were emailed to Polya Lesova, Financial Writer at Marketwatch.com, at 8:57 AM EDT.
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It seems like the markets have been sloshing around for days in anticipation of today's decision by the FOMC on interest rates. The question is - Will they raise 25 or 50 basis points? 25 is a given but 50 could send ripples through the markets and make for some very volatile trading. There doesn't seem to be anything in the near-term that will move Gold back above the $600 mark so it would seem that the path of least resistance points to lower prices in the Precious metals complex. Although the Dollar has been treading water for days the likelihood of further gains against the major currencies remains favorable, especially if the markets get a 50 point pop in the fed funds rate. Suffice to say that we'll see little in the way of volume or volatility until the announcement comes this afternoon. I guess we'll all need to find a good book to read until then.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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It seems like the markets have been sloshing around for days in anticipation of today's decision by the FOMC on interest rates. The question is - Will they raise 25 or 50 basis points? 25 is a given but 50 could send ripples through the markets and make for some very volatile trading. There doesn't seem to be anything in the near-term that will move Gold back above the $600 mark so it would seem that the path of least resistance points to lower prices in the Precious metals complex. Although the Dollar has been treading water for days the likelihood of further gains against the major currencies remains favorable, especially if the markets get a 50 point pop in the fed funds rate. Suffice to say that we'll see little in the way of volume or volatility until the announcement comes this afternoon. I guess we'll all need to find a good book to read until then.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Tuesday, June 27, 2006
Watching the DOW.
The action in the Stock index futures, specifically the DOW, is telling me that we are in for another sharp drop and that additional SHORT positions are warranted at this time. We began selling the DOW futures on May 9th and have continued to hold these positions. With another rate hike imminent, the markets may just choke on this additional tightening by the FED.
Dale F. Doelling
Chief Market Technician
Trends In Commodities.com
Dale F. Doelling
Chief Market Technician
Trends In Commodities.com
The following comments were sent to Polya Lesova, Financial Writer at Marketwatch.com, at 9:39 AM EDT.
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We've reached one of those interesting times in the markets where you have many fundamental forces colliding with the technical aspects of the markets. The FOMC meeting this week is keeping the metals traders on the edge as they square postions ahead of the Thursday announcement. The consensus is that the FED will raise rates again so that is already factored into the markets. With the Dollar/Yen having completed a 61.8% Fibonacci retracement at this morning's 116.69 high the Dollar's month-long rally could be coming to an end. If the Dollar turns lower it may just provide the spark that will allow the Precious metals to gain some footing and begin to move higher. Gold and Silver still have a ways to go before they test major resistance so, for now, this short-term rally in the metals has a long way to go before it becomes significant. For now, I continue to see the strength in GOLD and SILVER as nothing but a retracement from an oversold condition. When they approach their respective major resistance areas then we'll get a better idea as to whether the markets have actually turned the corner.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
_________________________________________________
We've reached one of those interesting times in the markets where you have many fundamental forces colliding with the technical aspects of the markets. The FOMC meeting this week is keeping the metals traders on the edge as they square postions ahead of the Thursday announcement. The consensus is that the FED will raise rates again so that is already factored into the markets. With the Dollar/Yen having completed a 61.8% Fibonacci retracement at this morning's 116.69 high the Dollar's month-long rally could be coming to an end. If the Dollar turns lower it may just provide the spark that will allow the Precious metals to gain some footing and begin to move higher. Gold and Silver still have a ways to go before they test major resistance so, for now, this short-term rally in the metals has a long way to go before it becomes significant. For now, I continue to see the strength in GOLD and SILVER as nothing but a retracement from an oversold condition. When they approach their respective major resistance areas then we'll get a better idea as to whether the markets have actually turned the corner.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Monday, June 26, 2006
Is the Dollar rally done?
The Dollar/Yen has now made a perfect 61.8% retracement from the December 5, 2005 high of 121.37 to the May 17, 2006 low of 108.96. This is only important if you give any credence to the major Fibonacci numbers. Due to this retracement number being reached it might be a good idea to watch what the Dollar does in light of the fact that the FOMC will be deciding their next interest rate move on Thursday. I like the SHORT side at this level because of the divergences that are taking place in our proprietary oscillators and the overbought levels that we are currently seeing in the Dollar/Yen. Choosing the correct entry point is extremely important when it comes to trading and this is one that I like. So, we're SHORT the Dollar/Yen after this one month retracement. Now it's a matter of waiting to see if our assessment of the market is correct. If we are correct the continuation of the long-term downtrend in the Dollar should be at hand.
Dale F. Doelling
Chief Market Technician
Trends In Commodities.com
Dale F. Doelling
Chief Market Technician
Trends In Commodities.com
Tuesday, June 13, 2006
Precious metals bull market - R.I.P.
The following comments were sent to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:56 AM EDT.
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The Precious metals bull market is officially over. Just remember, you heard it here first. I say this with some trepidation because the markets love to see me eat my words and, frankly, I'd love nothing better at this juncture. But, from a technical perspective, no matter how oversold the markets have become, the markets have sufferred far too much damage. The only thing left to do is to declare the bull market to be finished and hope that they'll bounce back and rally sharply. But, as one wise old trader once said, there's no wishing or hoping when it comes to trading.
AUG GOLD, having flirted with its 100-day MA for a couple of sessions, broke down in overnight trade and is now looking to revisit the highs from January at around $589. Any close below this level and $550 is the next obvious target on the daily chart. JUL SILVER, after being above $15.00 a month ago, is also pushing down to its January highs of around $10.00. As Silver took out dollar sized chunks on the way up it's doing exactly the same thing on the way down. The thing that I find most surprising about this decline is the correlation that we've seen in the markets. As Gold and Silver rose (along with many other commodities), so did the stock market. As we watch Gold and Silver decline, stocks are declining as well. I expected the latter but not the former. The improbable has now become reality. I guess that's what I love about the markets. What may seem totally illogical is exactly what a trader should anticipate. In other words, never rule anything out when it comes to the financial markets.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
_____________________________________________________________________
The Precious metals bull market is officially over. Just remember, you heard it here first. I say this with some trepidation because the markets love to see me eat my words and, frankly, I'd love nothing better at this juncture. But, from a technical perspective, no matter how oversold the markets have become, the markets have sufferred far too much damage. The only thing left to do is to declare the bull market to be finished and hope that they'll bounce back and rally sharply. But, as one wise old trader once said, there's no wishing or hoping when it comes to trading.
AUG GOLD, having flirted with its 100-day MA for a couple of sessions, broke down in overnight trade and is now looking to revisit the highs from January at around $589. Any close below this level and $550 is the next obvious target on the daily chart. JUL SILVER, after being above $15.00 a month ago, is also pushing down to its January highs of around $10.00. As Silver took out dollar sized chunks on the way up it's doing exactly the same thing on the way down. The thing that I find most surprising about this decline is the correlation that we've seen in the markets. As Gold and Silver rose (along with many other commodities), so did the stock market. As we watch Gold and Silver decline, stocks are declining as well. I expected the latter but not the former. The improbable has now become reality. I guess that's what I love about the markets. What may seem totally illogical is exactly what a trader should anticipate. In other words, never rule anything out when it comes to the financial markets.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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