The week ahead – some charts to get traders started.

Life is all about learning new things. According to Jack Welch you can just ignore the economic figures that don’t sit well with your political leanings as was the case when the former GE boss suggested the White House manipulated the latest US jobs figures. So that’s something I didn’t know. Without wanting to be glib about the whole thing it’s nice to see some headline grabbing positives coming out of the US. Yes there will be the problem that if participation levels fall away then it takes fewer jobs to make the percentage rate fall and so much of the job growth came in part-time employment but in this environment even a glimmer of hope is a plus. Not that it made a huge difference to the end picture at the US equity market close but it’s another box ticked showing the world isn’t ending today and we can get back to business. If you do want to examine further some of the issues with the jobs numbers the good folks at Zero Hedge have a good breakdown which you can find by clicking here.

While from an index perspective the NASDAQ is most interested in the following chart:

The Apple share price move has become such a focal point that I see it being reported around the world every day. Can someone let me know if they see a headline saying “The shine is off the Apple” because if it turns into a downtrend I want to be the first.

The overall bearish case for several instruments is not to be underestimated though. The state of debt and the debasing of the US currency is a huge issue and one that we will no doubt see causing some troubling outcomes in the future. The thing is though that for traders it’s no good to have a long-term view but try to express it on a 5 minute chart. I am very bullish on gold but if I had purchased it above $1,900 many months ago then I would have been in lots of trouble. Not that Benjamin Graham would agree entirely but inspired by him you need to remember that investment and trading a 2 very different things. In a similar position I fear for both the long and short-term view of the euro as well but for now the USD looks worse to me as I suggested last week when discussing the race to the bottom for currencies. On the subject of gold though I would think that if the momentum that has been seen continues it will become a very popular topic of conversation once again. With the per ounce price knocking on the door of $1,800 there is clearly a lot of interest which is reflective of the concern for the future of the USD. I could just say that you should watch the charts to tell how strong gold is but I think keeping a running total of the number of headlines you count each week talking about gold would be an even better sentiment indicator in this particular case.

You can see here that price is skating along the upper band of the 50 day moving average which shows a good degree of momentum at the moment. In the immediate term I think that this a really good indicator with a slowdown in the price gains being readily indicated with a close below this level.

The cheer squad for the AUDUSD will be on tenterhooks today with the rate managing to slip below the previous trough on Friday but not yet able to close below it as you can see on the chart below:

The immediate issue this week for technical traders in Australia to get on top of is the Australian index. Locally the equities market has put together a good string of gains which has been led by the performance of the finance sector. My colleague Ric Spooner put together a piece on the possibility of a whipsaw occurring at the top of the index trading range which you can see by clicking here. Looking at some of the big movers there are strong signs that yields are driving a good chunk of this rally. When looking at the highest yield payers at the moment in the constituents of the ASX 200 you can see that a large number of these have been on the move. Certainly you have to be careful with your forward dividend assessments because based on prior dividend payments the yields for some of the ‘leading’ companies will not be so favourable after the next payment.

Be sure to bookmark the 11th as we have unemployment data out in Australia. Some of the others to keep an eye on globally will be German industrial production out tonight, industrial production in the UK tomorrow night, and European CPI and US trade balance a little later in the week.

Have a good week

DL.

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2 Responses to The week ahead – some charts to get traders started.

  1. Hello David Great report. Can you advise where can I get a calender or list of economic data being release periodically.
    Thanks Gary H

    • David Land says:

      Hello Gary – thanks a lot for reading.

      One of the best sources is our platform which has the added advantage of being able to give you price and alerts and is free with demo’s available which last forever. Just go to cmcmarkets.com.au – you only need to put in a couple of details and you are good to go.
      This platform is where I got all the data together for the report that you read so it’s very solid.
      I hope this helps.

      All the best

      David.

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