Weakness continued in the major indices today as the Nasdaq 100 and small caps lead the market lower. Both small caps and the QQQ’s bounced off trend line support and the 50 day EMA and printed a hammer candle on heavy volume. This gives longs a reference point to trade against if playing for a bounce, but we remain vulnerable below the 8/21 day. Bonds were higher on the day as they look to test the 109 area of resistance in TLT. Global equity markets were mixed on the day with India and Greece leading to the upside while Colombia, Thailand and Turkey lead to the downside. I haven’t really had a chance to analyze the price action of the past few days, but at first glance it looks like we remain in a volatile range until we break support at the 50 day EMA. Today’s low provided a point of reference to trade against as we came into support and active shorts likely covered and tried some longs rather than pressing. Obviously you want to see a break above today’s high and close above the 8/21 day EMAs to regain bullish momentum.
Leaders to the upside included coal stocks (KOL), steel stocks (SLX), utilities (XLU), telecom (VOX) and financials (XLF).
Leaders to the downside included gold miners (GDX), large cap biotech (IBB), social stocks (SOCL), solar stocks (TAN), small caps (IWM), and healthcare (XLV). A lot of momo names have been very week in the past few days. The heavy volume and bottoming tails today in biotech and technology as a whole could be signaling some capitulation and a buying opportunity against the day’s low.
In the commodity space, gold pulling back further into trend line support in the 1309 area. Now solidly below the 8/21 day as they curve down. Next support at 1300 and 1275.
Silver grinding back to the downside as it moves into support around 19.80-20 though it is back below all the key EMAs.
Copper continues to build a range between 2.90 and 3.00. Watch for a close above the 8 day EMA that may provide entry for a short term catch play long setup.
Natural gas drifting lower with the 8 day EMA as resistance. Support 4.19.
Wheat testing its recent highs after holding the 8 day EMA. Like I’ve been saying, it remains bullish until we break and close below the 8 day.
Soybean oil trying to hold the 50/100 day EMAs at 40.90, but remains weak below the 8/21 day EMAs that are now sloping downward. Next support at 40.35, 39.90.
Corn closing in the upper part of its recent range testing 490, and looks to want to breakout soon after testing the 21 day EMA. Still remains a great chart on a short/intermediate and long term basis.
Palladium making new highs intraday with some negative momentum divergences. See if it can build this upper level base and work off these overbought conditions. Still think palladium looks good on an intermediate basis after last week’s backtest of the breakout area.
Platinum continues to hold trend line support at 1430.
Cocoa selling pressure increasing as it broke and closed below the 21 day EMA on Friday. Next area is the 50 day 2911 and 100 day at 2825.
Sugar continues to look weak below falling 8/21 day EMAs. Support 16.47, 15.90.
Soybean meal flagging above 455 as it looks to make an attempt at the intraday highs of 472.90 in the coming days.
Oats remain a mess. Head and shoulders pattern with neckline at 410. Below 410 support at 401, 380.
Soybeans continue to hold the 21 day EMA and look to want to test the recent highs after some more basing action above 1365. Closed at 1431 on the highs of the day (light volume).
Cotton bearish engulfing candle after being rejected by resistance at 93.50. Back below the 8/21 day EMA, immediate term bullish momentum is no longer there.
AUD/USD continues its breakout and looks like it will test .9237 in the short term on its way to an intermediate term price target of .94 as per the breakout of an inverse head and shoulders pattern.