Monday, June 20, 2011

U.S. Financials Still Look Sick....Would You Have Bet on the Malaysian Index?

The big news over the weekend was Greece and the 17 nations were unable to come to an agreement to put together a package for that beleaguered country. This agreement has been pushed off yet again until July. Markets both here and Europe initially reacted in a negative fashion but have come back and appear to be regrouping and rethinking the implications of this delay.

The bank stocks however still look sick and the trends are clearly down in this sector.

The Shanghai and Hong Kong indexes are also looking very negative as are most equity indexes around the world. The only index that is looking positive using our trade triangle technology is the Malaysian index.

Let’s take a look at the major markets now.....

S&P 500: -60. The market action continues to reflect a trading range. The market is at the lower end of the Donchian channel and is oversold so we may see a rally to resistance around $1,300. Major downside support is at $1,250.

Silver: +55. I would watch this market very carefully as I feel that it is probably at the lower end of its range. We would use the Donchian channel as support. We may bounce around for another couple of weeks but come July I think we’ll see this market on the move. Market is oversold and expect to see a bounce from current levels. Near term resistance at $36.00. Support at $34.00.

Gold: +90. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at $1,353 today. Major support at $1,513.

Crude Oil: -90. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. The market is however heavily oversold and at the lower end of the Donchian channel. We would expect to see a bounce from current levels but would like to see more positive action.

The Dollar Index: -65. Our indicators are still negative longer term for the dollar. Minor support at $74.00. Major support at $73.00. Big resistance at $76.00.

The Thomson Reuters/Jefferies CRB Commodity Index: -70. We are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.


No comments: