Wednesday, August 11, 2010

Marubozu for Everybody!!

Well Not Quite Everyone

Today was an unusual day. There were strong moves in all of the broad market indicators used, except for Gold, which was keeping its cards close to the vest.

Gold Daily

Gold continued it's flagging near the 1200 resistance level with 1189 support below and 1210 as resistance above.

Let's look at the other macro indicators before shifting to the equity index ETF's.

West Texas Intermediate Crude Daily

US Dollar Index Daily

iShares Barclays 20+ Year Treasury Bond Fund Daily

Oil, the US Dollar Index and the Bond ETF all posted strong moves printing candles called Marubozu. Technically a Marubozu would be a candle with the shadows (the thin lines on the ends of a candle marking the high and low) shaved off, so opening on the low and closing on the high or vice versa, but I am taking a little artistic license as all technical analysis is subjective. A my twitter friend @Bimmertrader points out I don't shave with the Gillette fusion razor and am considering the day's low/high as a little stubble. These candles signify a very strong move and an expectation for continuation in the same direction. For Oil the direction was lower and now sees support at 76.99 and the bottom of the channel at 76. For the US Dollar Index and Bonds it was higher. Resistance for the Dollar index comes at 82.50 and then 83.65, and for the Bond ETF at 102. Note also that the MACD crossed over today for all 3 and that the RSI moved across 50 for Oil and the Dollar Index and was already there for the Bond ETF. These indicators reinforce the information from the Marubozu.

Now let's get to the Equity Index ETF's

SPY Daily

IWM Daily

QQQQ Daily

More Marubozu here, all to the downside, with some additional artistic license taken on the Q's. The IWM took the lead today, as it had in the previous move to the upside. It gapped down below the 20, 50 and 200 day SMA's and now sees support at 61.50 and then 60.25. The QQQQ also lost the 50 SMA but regained it by the close and it is now support with 45 and then 44 as support lower. The SPY did not reach the 50 day SMA so it remains supp at 108.88 with 108 and then 107 below. The IWM also was the first to move the RSI under 50 but they are all under 50 now, and where the MACD crossed on the IWM yesterday it made the cross today on the SPY and the QQQQ. This set of pictures points lower for all the equity indexes.

The total picture out of today's trading was a large move stronger for the Dollar Index and Bonds and lower for the equity index ETF's and Oil. Many will talk about a rebound for tomorrow but the Marubozu say they are wrong and the moves will continue.

Trade'm well tomorrow!

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