Wednesday, July 14, 2010

Technical Picture - Rally Testing Key Levels of Interest

Another accumulation day after a solid start to earnings season. Price is now testing the downsloping trendline and the 50 SMA.

The S&P has rallied 8.8% already this month from intraday low to high bringing the numerous technical levels of interest into play. Despite the extensive six day surge, however, the market has a catalyst after hours (INTC earnings) for further gains in early trade Wednesday. An initial resistance above is in the 1105/1107 zone with a more important area at 1112/1115 (200 SMA/50% retracement of April-July slide).

Chips stocks should rally back to the top of the recent trading range.

Euro continues to show strength vs. $USD which breached its trendline on closing basis today.

Expecting Gold to breakout on next test of trendline.

AGU - Good example of one of my favorite leading indicators - MACD divergence. Positive divergence of MACD to lower prices foreshadowed a reversal. Price reversed sharply and has come into resistance of 200 SMA. I'd like to see a shallow retracement (38%) for entry of a swing trade long.

APKT forming an ascending triangle.


john said...

Jamie, do you mean you are watching for a break lower on the next test of GLD's trend line?

Jamie said...


That's right. The gold hedge is out of favor with Euro strength. No need to hold gold in the short-term. If eventually, the $USD/$Euro spread becomes too wide, gold will bounce back.