skip to page content

Are The Markets Just Teasing Us?

Adam Hewison - MarketClub

Loading the player...

It would appear as though most of the major indices have just been spinning their wheels and going nowhere fast in the past 4 to 5 weeks as they have all been in a broad trading range. This type of market action can lull investors to complacency, but for me it has always been a wake-up call to pay close attention to the market as something big is going to happen.

As I see it, the market is doing one of two things, it's either building a base to move higher or it's a distribution top  only time will tell which is the correct answer.

One of our members suggested that the Dow 30 could be making an inverse head and shoulders formation. Certainly this is possible, but I need to see a clear breakout to the upside to confirm this formation.

The other concern I have is the damage done to the NASDAQ earlier this week as it fell to a 6-week low. How this particular index closes on Friday is going to be very important in my mind. Again, I will be watching this market very closely for signs of either a continuation of the bullish trend or a top.

Yesterday, I posted a special report on two major stocks, Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). If you missed this report, I highly recommend you check it out.

Indices - Out of the three indices I follow, the S&P 500 with a + 85 Score is exhibiting the strongest upward trend. Following the S&P 500 is the NASDAQ and the DOW and not necessarily in that order, as they both appear to be fighting technical problems. The DOW is exhibiting a monthly red Trade Triangle, indicating longer term weakness, while the NASDAQ flashed a weekly red Trade Triangle this week indicating a sidelines position in this index.

Gold - With the weekly and daily Trade Triangles negative, I expect gold to continue to be on the defensive. Longer-term however, I still remain positive since the long-term monthly Trade Triangle is still green. Look for gold to find Fibonacci support between the $1,290 and $1,266, basis spot gold. I expect to see psychological support come into the gold market around the $1,300 level. If gold is to move higher later in the year, it's going to have to repair some of the technical damage that has been inflicted in the past two weeks. Look for more sideways to lower action in this precious metal for the next few weeks.

The Dollar - At this particular time, I still prefer the Euro over the Dollar despite the pullback from the 1.3960 area. Look for Fibonacci support to come into this pair at the 1.3721 level and also at the 61.8% Fibonacci support level at 1.366. There may be several more weeks of sideways action before the Euro reasserts itself and starts moving higher to the 1.4200 target zone. With a Score of -70, we are stuck in the fringes of a trading range at the moment. The best types of technical tools to use in a trading range are oscillators such as the Williams %R and the RSI indicator.

Energy - While there has been a sharp pullback from the $104 a barrel crude oil prices, the market appears to have found support right around $97 which is just between the Fibonacci support levels of $97.94 and $96.38. With the Chart Analysis Score a +55, I expect this particular commodity to be in a trading range in the short term. Look for support around the $98 to $97 level and resistance coming in around $100 to $102 area, basis the May crude oil (E) contract (CL.K14.E).

Back to videos

Get Started With Your 30-Day MarketClub Trial Right Now

Get Started

© Copyright MarketClub™ All rights reserved | User Agreement | Do Not Sell My Information

U.S. Government Required Disclaimer—Commodity Futures Trading Commission
Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41—HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

All trades, patterns, charts, systems, etc., discussed in this advertisement and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher or INO.com. No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses. No representation or implication is being made that using the MarketClub™ methodology or system will generate profits or ensure freedom from losses. The testimonials and examples used herein are exceptional results, which do not apply to the average member, and are not intended to represent or guarantee that anyone will achieve the same or similar results. Each individual's success depends on his or her background, dedication, desire, and motivation.