The indexes are all higher for the day and are now close to major resistance basis the S&P 500. Our trade triangle technology has been bullish on the S&P 500 since $1,300 and we are sitting on some nice profits. However I do believe that we are close to a cycle high period and that we could see some profit-taking coming into the index markets next week. The current rally has been on extremely light volume even for summer trading.
Crude oil pushed upwards to the $100 a barrel range today and I think perhaps we are close to seeing this market peter out and take a rest in the short term. Technically, the market is fast approaching the upward level of its Donchian trade channel. I expect that we will see some profit taking coming in around current levels.
Other markets were generally quiet so far today.
S&P 500: +100. The S&P 500 is now approaching thin air. Meaning there is not a lot above this market in the form of resistance except the $1,361. While the market is heavily overbought, momentum continues to be on the upside. Intermediate term traders are long this index from $1,300 and are sitting on nice profits. Resistance comes in from $1,355 to $1,360. Support comes in around the $1,300 level.
Silver: +75. The silver market is fast approaching the top of the Donchian trading channel and we expect that area which comes in at $36.76 to hold the market. We continue to remain in a broad trading range with the continued belief that we are building in big energy base to propel this market higher later in the quarter. Long-term trade triangles remained positive. Look for support coming at the $34 level.
Gold: +75. Today’s action in spot though is indicative of a market that has stopped to catch its breath. We still appeared to be in a broad trading range and we expect that we are building a very large energy base to propel this market higher later in the year. Major support at $1,480. Major resistance at $1,560.
Crude Oil: -55. Crude oil came close to reaching our $100 a barrel price objective before profit taking kicked in. We think for the time being that this market has had a good run and we would like to take some money off the table based on our $90.07 buy that we recommended about 12 days ago. We would now look for support around the $94 level.
The Dollar Index: -85. Today’s action in the dollar index would point to a market that has just run out of gas. The longer-term trend based on our trade triangle technology continues to be negative. For the last several months this market has remained in a trading range bounded by $76 on the upside and approximately $73.50 on the downside. We expect this range trading to continue a while longer.
Thomson Reuters/Jefferies CRB Commodity Index: -55. This index has moved back to an area around $345 that will probably create some problems for any further upside momentum. The market is now overbought. However, it is just past the midpoint of the Donchian trade channel and as such is in kind of a no man’s land at the moment. Look for resistance starting at $345 and $350. Support should enter this market around $335 on the downside.