Crude Oil (USO)
We have to confess that we still don’t have a good read on this market due to the choppy price action. The drop from the US$52.85/bl high still looks to us to be a bit impulsive and we are now viewing things by going back a few weeks.
We spent a lot of time gazing at the chart and trying to put a count on it, but only because our analyst team enjoys the challenging puzzle that it presents but on the other hand a advising our clients to trade it with hard earned money is another matter.
This is the kind of pattern we are staying out of and advise to avoid trading as the trend and the count are very unclear. If anything, we would be inclined to say that the next move would be to the down side. We are saying this because we can see that reversal from the recent high looks to be too impulsive and resembles the top in May to June as you can see from the charts.
Should this downside pattern develop and the trend line in the first chart breaks, then we could see the potential for decent short opportunity.
So What Are We Saying
We believe that SPY is possible in that blow off stage and equity markets are likely to make more highs early next week. We still think that in the longer term they are topping out here, but we still believe that it is probably unwise to short into a blow off.
We are therefore still holding off on recommending any shorting of the market just yet and we will wait to see a failure at new highs and break of the channels. Precious metals are a buy in the medium term. Everything we are seeing right now indicates that gold should be heading towards US$1,375-80 area.
Natural Gas (UNG) and Oil (USO) are both lacking in direction and we have difficulty at the moment to get a clear picture. It is currently our belief that both will fall, but that is based on short-term patterns and counts with low probabilities. A convincing drop could provide more certainty and set up decent shorts in the next week or two.
BONDS (TLT) will continues lower as it heads to below US$122.5, which would definitely be a buy.
The dollar did hit our upside targets and should over the next week re-test recent lows.
We have to confess that we still don’t have a good read on this market due to the choppy price action. The drop from the US$52.85/bl high still looks to us to be a bit impulsive and we are now viewing things by going back a few weeks.
We spent a lot of time gazing at the chart and trying to put a count on it, but only because our analyst team enjoys the challenging puzzle that it presents but on the other hand a advising our clients to trade it with hard earned money is another matter.
This is the kind of pattern we are staying out of and advise to avoid trading as the trend and the count are very unclear. If anything, we would be inclined to say that the next move would be to the down side. We are saying this because we can see that reversal from the recent high looks to be too impulsive and resembles the top in May to June as you can see from the charts.
Should this downside pattern develop and the trend line in the first chart breaks, then we could see the potential for decent short opportunity.
So What Are We Saying
We believe that SPY is possible in that blow off stage and equity markets are likely to make more highs early next week. We still think that in the longer term they are topping out here, but we still believe that it is probably unwise to short into a blow off.
We are therefore still holding off on recommending any shorting of the market just yet and we will wait to see a failure at new highs and break of the channels. Precious metals are a buy in the medium term. Everything we are seeing right now indicates that gold should be heading towards US$1,375-80 area.
Natural Gas (UNG) and Oil (USO) are both lacking in direction and we have difficulty at the moment to get a clear picture. It is currently our belief that both will fall, but that is based on short-term patterns and counts with low probabilities. A convincing drop could provide more certainty and set up decent shorts in the next week or two.
BONDS (TLT) will continues lower as it heads to below US$122.5, which would definitely be a buy.
The dollar did hit our upside targets and should over the next week re-test recent lows.
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