08/11/06 Market Update

Stocks:

The market suffered again for the week but the small cap, Russell 2000 is now resting between the rising trend line and horizontal support with the 100 week simple moving average just below current levels. The weekly stochastic oscillator managed to move above its moving average and the over-sold threshold pushed by Thursday’s advance. The rising trend line has provided support three times in the past. With the oscillator tuning up, it appears as if the market will again, even if only temporarily.

Russell 2000 – Weekly

If the market does find support here the rally may not make it all the way back to the top of the channel. Below see that the monthly oscillator has broken down from over-bought and the monthly support lines are significantly below current levels. Buyer of this rally should look to sell on any turn of the weekly oscillator or a turn down from over-bought on the daily.

Russell 2000 – Monthly

Bonds:

The 30-Year U.S. Treasury broke below its rising trend line with last week’s decline. This indicates the decline will be a bigger correction verses a consolidation. The oscillator has now broke below the over-bought threshold. Bond should march down the Gann grid line while the oscillator corrects its over-bought condition.

30-Year U.S. Treasury Bond Price – Daily

Gold:

We sold the XAU penetrated its upper channel line but failed to maintain the level. Prices quickly declined below the rising Gann grid line and rising trend line indicating no support for the current advance. The oscillator also created a lower top pattern on this advance. Prospect for the XAU are for a decline over the next few weeks.

XAU – Daily

Back to Members Area Index >>