In the August 29, 2012 episode of MarketClub TV (INO.com), Adam Hewison covers inflation and the bull market in the commodity sector. He also discusses crude oil more closely, given the fact that hurricane Isaac has now made landfall in Louisiana.
Why are the markets so quiet? Could September be a killer month? History has shown that September is the scariest month for Wall Street. Many traders remember September of 2008. Could this September be a repeat of the 2008 disaster? Europe and Ben Bernanke hold the keys to how September plays out.
Hewison examines the nine major sectors and point out which ones are performing well, and which ones to avoid. He also looks at one index that is not performing the way it should be.
SUMMARY
S&P 500 INDEX
Monthly Long-Term Trend = Bullish
Weekly Intermediate-Term Trend = Bullish
Daily Short-Term Trend = Bullish
S&P 500 closed last Friday @ $1,411.13
For the past three days, the index has been extremely quiet. It has been like watching paint dry. While the major trend for this index remains positive, we still believe that major resistance lurks at the $1,420 to $1,425 area and will continue to present problems for this market. With a Score of +100, this index is in a bullish trend. Our monthly and weekly Trade Triangles are now positive on this index.
CRUDE OIL (October 2012)
Monthly Long-Term Trend = Bearish
Weekly Intermediate-Term Trend = Bullish
Daily Short-Term Trend = Bearish
CRUDE OIL closed last Friday @ $95.75
The crude oil market is lower for the week and appears to be rounding out the top. We would look for support to come in this market around the $93.00 level where an uptrend line comes into play. Our long-term 61.8% Fibonacci retracement level of $98.00 is now major resistance for this market. With a Score of +55, crude oil is in a broad trading range. Long-term traders should remain short this market with appropriate money management stops.
EURO vs USD (SPOT)
Monthly Long-Term Trend = Bearish
Weekly Intermediate Term Trend = Bullish
Daily Short-Term Trend = Bullish
EURO vs USD closed last Friday @ 1.2517
The Euro is barely changed for the week. Is everyone waiting for August to get over with and for real trading to begin in September? There will be lots of announcements and politics coming out of Europe starting in September, which should prove to be an interesting month. With the intermediate-term trend positive, the long-term trend negative and low market activity for the Euro the current trading environment is contributing to a choppy market. The next level resistance is between 1.2600 and 1.2750. With a Score of +60, the Euro is in a trading range. Long-term traders using our Trade Triangle Technology should maintain short Euro positions with the appropriate stops in place.
GOLD (SPOT)
Monthly Long-Term Trend = Bullish
Weekly Intermediate-Term Trend = Bullish
Daily Short-Term Trend = Bearish
GOLD closed last Friday @ $1,669.65
While gold is about $10 lower for the week, we still like the way this market is setting up. Potentially we could see a pullback to some key Fibonacci levels at 38.2% = $1,644.84, 50% = $1,634.68 and 61.8% = $1,624.52. Make no mistake about it, we are in a bull market for gold. A pullback and further consolidation for this market is healthy. Gold is still below our original buy point of $1,670.93 at our monthly Trade Triangle. With a Score of +85 today, gold is officially in a bull market. Long-term term traders should be long gold now.
COPPER (December 2012)
Monthly Long-Term Trend = Bearish
Weekly Intermediate-Term Trend = Bullish
Daily Short-Term Trend = Bearish
COPPER closed last Friday @ $3.4865
The copper market is lower for the week and we see little to get excited about on both the long side or short side of the market. Copper continues to be trapped within a broad trading range with major resistance at $3.55. Look for support to come in to this market this week starting around $3.43 and extending down to $3.40. Copper’s Chart Analysis Score is currently a -55 which represents a trading range. Long-term traders should be holding short positions with appropriate money management stops.
SILVER (SPOT)
Monthly Long-Term Trend = Bearish
Weekly Intermediate-Term Trend = Bullish
Daily Short-Term Trend = Bullish
SILVER closed last Friday @ $30.78
For the past four days, silver has been moving and sideways and is pretty flat for the week. We are not surprised to see some form of consolidation come into this market as we witnessed a rapid move of 10% in the past seven days. We are very close to turning bullish on this market. A close today over the $31.50 level breaks a 16 month negative force line which would indicate that we are going to see higher prices in the future. We are waiting for our monthly Trade Triangle to kick in to indicate that we are in an official bull market for silver. For now our long-term monthly Trade Triangle remains negative. With a Score of +70, silver is in a broad trading range. Long-term traders should be holding short positions in silver with appropriate money management stops.
REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Long-Term Trend = Bullish
Weekly Intermediate Term Trend = Bullish
Daily Short-Term Trend = Bearish
CRB COMMODITY INDEX closed last Friday @ $306.04
This index remains higher for the week, indicating that the bull market is very much intact in commodity prices. With a Score of +75, this index is in a positive trend and should be approached and traded on that basis. Currently this index is in an inflationary stage and we expect pullbacks in this index to be met with strong support at the $305 to $300 level. Major resistance comes in at the $320 area where a long-term negative force line comes in. This index is presently indicating that we are going to be looking at inflation in the future. Long-term traders should be long this index with appropriate money management stops.
