The US Dollar Index made a false break above resistance at 83.50 before retracing to test support at 81.50. Respect of support and the rising trendline would confirm the primary up-trend is intact. Breakout above 83.50/84.00 would signal an advance to 86.00* in the next few weeks and to the 2010 high at 88.50 in a few months. Another 63-day Twiggs Momentum trough above zero would reinforce the healthy up-trend. Failure of support at 81.50 is unlikely, but would warn of a trend reversal.
* Target calculation: 82 + ( 82 – 78 ) = 86
Spot Gold continues to consolidate on the weekly chart between $1530 and $1650 per ounce. 63-Day Twiggs Momentum below zero warns of a primary down-trend. Recovery above zero, however, would confirm that a bottom is forming. Breakout below primary support at $1530 would offer a target of $1300*; recovery above $1640 would indicate an advance to $1800.
* Target calculation: 1550 – ( 1800 – 1550 ) = 1300
The daily chart displays a symmetrical triangle formation. Breakout would indicate direction of the next primary move. The failed down-swing — with a reversal short of the lower border — suggests an upward breakout. Follow-through above 1640 would confirm.
The CRB Commodities Index broke its descending trendline, indicating that a bottom is forming. Breakout above medium-term resistance at 305, strengthening the signal, would test 325. Reversal below 295, however, would suggest another test of 265. Recovery of 63-Day Twiggs Momentum above zero would also suggest a primary up-trend.
Brent Crude has already penetrated its descending trendline, suggesting that a bottom is forming. Follow-through above $108 strengthens the signal. Recovery of 63-day Twiggs Momentum above zero would indicate a primary up-trend, while a peak below zero would signal a decline to $75 per barrel*.
* Target calculation: 100 – ( 125 – 100 ) = 75
I dont get it? Housing and employment in the US still looks crap. China hard/soft? Shipping flows around the world? And then you have Europe……Where do you start?………..I want to know what the various traders around the world know that I don’t know cos where the stock markets of the world are going
don’t make sense.
Two possible factors: the euro-zone is strengthening (see post earlier this week) and QE3 expectations may be firming — not good news but higher inflation would lift gold, commodities and stocks.
It doesn’t make any sense because the machine algos are doing all the trading.
Any traditional analysis is only useful for watching and NOT trading this market.
My advice is just stay out and wait for the reset.
US Dollar index = bearish divergence on Twiggs MFlow.
CRB and oil looking bullish, this supports an equities rally. When US equities rally the USD seems to fall.
I take it you are referring to Twiggs Momentum — Money Flow does not work without volume. I wouldn’t call that a bearish divergence. Otherwise agree.
Yes, sorry I meant Twiggs Momentum Oscillator (TMO). TMO has made a slightly lower high (almost equal but not quite), but USD index has made an obvious higher high. Is this not a divergence? (Please know I ask this with genuine respect, not sarcasm). Also if you draw a trendline below the TMO you will see a break to the downside followed by a polarisation of the trendline from support to resistance. A retest respected this resistance.
Interesting question. TMO made a slightly lower high but but not a clear divergence. Momentum is an oscillator so you would expect equal peaks if the trend is constant. If oscillating above zero, it would be a constant up-trend; below zero, a constant down-trend; with zero at the mid-point, a ranging market. Divergence should ideally show a clear transition from one to the other or at least a sharp difference in height of peaks or troughs.
A trendline under rising momentum will highlight accelerating momentum. A trendline break will indicate slowing acceleration — not necessarily reversal.
Proper market analysist and logical use of true market fundamental has completely left the known planettary orbit, usually whenever the planet shifts axis, we go through an ice age; so, I think the stock market and it’s usual ways of operating, is already out of wack an cannot be fixed; anyone thinking they could become richer soon is actually unknowingly on the way to becoming poorer and can’t excape this phenomenon,Just like “the way of the mammoth”
Thanks Colin. You have explained it well, and I have learned something.
…Sorry I didnt mean to open a new comment, I was replying to our discussion under comment 3.