Monday, August 03, 2009

Technical Picture - Higher Highs for Broader Markets

The markets opened the new week/month on a modestly favorable note. Positive news/data from overseas and better than expected construction spending and ISM kept buyers busy. Despite the choppy session, the S&P and NYSE notched new highs, unconfirmed on the NASDAQ. The rally was broad based with energy/commodities leading the way on a weaker $USD.
Speaking of the $USD, it breached support on a closing basis, however, the lower low is unconfirmed by the MACD and RSI. Same goes for the $CAD which gapped higher. I suspect this may be a head fake. If so the commodity rally will stall. Watching this one closely.

Two trades from the WL, CNQ gapped up on weak $USD, but broke the ORH way too soon as measured by distance between price and the rising 5 period EMA. Wait for a better entry.

Price retested the ORH as support, held the 5 ema on closing basis, and eventually carved out a base at $64.00.

V formed a base at $67.00. The base BO would lead to a clear path back up Thursday's break down base. That part of the trade went very smoothly, unfortunately, it wasn't finished.

I was sure that $69.00 would be the top so I shorted it at $69.00. V proved too strong and the trade had to be scratched.


bl said...

Nice work. I guess that's standard: weak dollar= strong commodities esp foreign? Gap up and run and open. udn/udp. Do you keep a chart for that when trading commodities?

TJ said...


Yeah, that's exactly right. The main supplier of oil for U.S. is Canada. So Canadian oil works well against a weaker dollar.

$CAD chart updates real time also UUP to monitor $USD.

Unknown said...

When you say: "the lower low is unconfirmed by the MACD and RSI."

what would confirmation be for each?


TJ said...


I'd like to see the MACD for both currencies in the same range as the last time these prices were tagged about 2 months ago. I'm not an expert on currencies. This is just an observation that I thought was worth sharing.