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Technical Trades Of the Week – SPX, Dollar, Nat Gas

IMG Auteur
Published : December 16th, 2012
425 words - Reading time : 1 - 1 minutes
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Category : Technical Analysis

 

 

 

 

Yesterday’s price action was very bearish yet again and we are patiently waiting for a counter trend pullback to happen. While three are some good looking plays out there I really do not want to get long until the market clears the air with a bout or three of strong selling. Remember 3:4 stocks follow the market and the odds of picking a commodity or ETF that bucks the trend is unlikely. If you are interested in powerful stocks & ETFs the buck the trend check out my FREE Trading Ideas live Go Here: https://stockcharts.com/public/1992897


SP500 / Broad Stock Market:


We have seen a bug run up in stocks this month and things are looking a little long in the teeth. A large number of stocks are trading above their upper Bollinger band and the broad market is testing that key resistance level also. Typically when a Bollinger band is reached we see price reverse for a couple days at minimum.


While the equities market is in a new uptrend as seen by the moving averages I pullback seems imminient. The last two days has formed reversal candles and are pointing to lower prices.




Dollar Index Hourly Chart:


This chart shows a possible bottom forming in the dollar pointing to a 3-8 day pullback in stocks.




Gold Futures Hourly Chart:




Natural Gas Hourly Chart:




Morning Trading Conclusion:


Looking at the charts on several different time frames, not all shown here, technical analysis shows a pullback in stocks is highly likely. This is what we are currently positioned for.


The US dollars downward momentum is slowing and if it can find a bid today it should trigger strong selling in both stocks and commodities. Gold and silver are down sharply along with miners.


We have been watching natural gas for a few months and know that it has been trading inverse to what stocks do. This bodes well for a bounce in natural gas if stocks start a sell off. That being said, natural gas is trading at a key tipping point that could spark a very fast and hard drop. This knife can fall at a speed that will take a slice out of your trading account if not traded and managed properly (tiny position and use of a stop). I actually like natural gas the more it moves down and could issue a buy alert on it today or this week. I would like to see volume decline at this level showing the momentum is slowing


Chris Vermeulen

Editor, the Gold and Oil Guy


 

 

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