Thursday Commodities & Currencies
Disclaimer: All charts and comments are intended for education and discussion purposes only. No investment recommendations are being offered. Please do your own research and take responsibility for all investment decisions that you make. Questions and comments related to this post are encouraged. | MON - Sector Strength | TUE - Interest Rates | WED - Market Breadth | THU - Commodities & Currencies | FRI - Market Sentiment | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |
The market action Thursday was a bit confusing. The new highs /new lows were healthy for both major indexes, reversing the recent pattern of weakness. However, the bullish percent of the NASDAQ was down, and is now just above the all important 50% level even though it has been the stronger index lately. The NYSE bullish percent was up a bit, and is maybe a reflection of its oversold condition. Declan Fallond summed it up well when he said that Thursday's market was positive for stocks since they held onto Wednesday's gains.
Stocks are entering a favorable seasonal period. The last day of the month and the first two days of the new month are usually strong for the market, and July is usually a strong month for stocks. However, since the 4th is on a Wednesday, many investors will be on vacation for the entire weak, so volume could be weak and it may be hard to assess the overall market for a while.
I'm also a little confused regarding commodities because there is lots of weakness particularly in the precious metals. Most of these commodities are just above their 40-week moving averages, and the CRB still hasn't broken out of its consolidation range that began in the spring of 2006. I'm not sure what this weakness indicates so I'll just show the usual chart below and wait a few weeks to see how prices behave.
Gold is in a weak trend showing a series of lower lows, including a short-term trend line break.
A couple weeks ago it looked like the CRB was going to break out being led higher by oil prices. It seems odd to hope for higher commodity prices, but because we have been emerging from a period of economic weakness, the higher commodity prices were confirming the economic strength. So the weakness in commodities is a little disappointing in terms of assessing the economy. This weakness may be just temporary, so let's wait and see... another point, the RSI needs to break above the bear resistance level to re-establish the uptrend.
One last chart below. Uranium has been weak after a strong run for a number of years. The RSI is testing the bull support level, and prices are testing the uptrend line. Breaks of these technical levels could indicate more weakness in uranium than just a pull back in the uptrend.
