Expect market to move silently into the weekend
Editor’s note: this column was originally published on Capital Essence’s CEM News on November 29, 2007. It’s being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.
Good Morning. This is Capital Essence’s “Market Outlook” (the technical analysis of financial markets) for
As we’ve mentioned, in the previous Market Outlook that: “expect things to be a bit sloppy at current level”, stocks closed slightly higher at the end of a choppy session as traders awaited key speech from Fed chairman Ben Bernanke.
Precious metals continue to decline with spot gold tumbled more than $11 Thursday to settle at $792.80 an ounce. It worth noting that weakness in gold prices was offset by strengthening of the US Dollar. And as we’ve discussed right here a couple months ago, this [the lower greenback] is the last thing the bulls want to see.
Chart 1.1: Gold Index (daily).
Today decline had pushed the yellow metal into the area of support at November’s low, about 780. As mentioned, a failure to hold above this level will complete the bearish double top pattern and test of key support around the 700 level is, therefore, inevitable.
Chart 1.2: Standard & Poors 500 Index (daily).
As expected, the S&P continues to trade relatively “dry” beneath the area of overhead supply that runs from 1465-1500. The action suggests the upcoming test of 1500 may be met with aggressive sellers. Support is about 1400.
Chart 1.3: Dow Jones Industrial (daily).
Similar to the S&P, the blue-chips index is also traded pretty “dry” Thursday. The index has a layer of overhead supply that runs from 13200-13500. As mentioned, expect trading action to remain choppy until the bulls manage to push prices above this level. Support is about 12700.
In summary: Thursday’s trading action indicated that market still hasn’t decided where it wants to go from here. And more likely than not, market may just move silently into the weekend from here.
(By: Michelle Mai for Capital Essence)
Note: Michelle Mai writes technical analysis for Capital Essence and is the editor of Capital Essence’s “Market Outlook” newsletter. To receive the daily edition, please subscribe. It’s now available at a monthly rate.
