Is this the start of a new trend?

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By Adam Hewison

Is today’s huge upward move in equities going to continue or fizzle out?

The sharp downward trend in most of the markets last week was dramatically reversed today, with huge gains in equities, crude oil, gold and many other markets.

Is this the start of a new trend?

It is way too early to tell!  Last week we witnessed tremendous liquidation in markets across the board.  This week we would not rule out the possibility of a counter trend rally, which today’s market action could very well be.

The “Silly Season” or any trading after December 15th, is getting closer!  It has been a difficult year for many investors and hedge fund managers, and you don’t want to be swinging for the fences to make up your numbers in the last two weeks of the year.  I believe the last couple weeks have been a rehearsal of what December is going to be like with thin trading volume and erratic swings.

As always, we put our trust in our Trade Triangle technology and allow that technology to lead us to profits.

Now, let’s go to the charts and the video and see how we can create and protect your wealth in 2011.

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S&P 500 INDEX
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QUICK TAKE: Bearish
Combined Strength of Trend Score = -75
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
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The 61.8% Fibonacci retracement level of $1160 proved just how important these points are to the market and trading professionals.  With a Chart Analysis Score of -75 we are not getting overly excited with today’s action, as we are still in a downtrend.  Long-term and Intermediate term traders should either be in cash or continue to hold short positions in this index with appropriate money management stops.
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Suggested S&P 500 Trading Instruments:
Non Leveraged ETF’s: (Long SPY) (Short SH)
2 x Leveraged ETF’s: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.
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SILVER (SPOT)
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QUICK TAKE: Bear Market
Combined Strength of Trend Score = -75
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trend = Negative
Daily Trade Triangles for Short-Term Trends = Positive
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For the past seven days, the spot silver market has been generally moving sideways and has lacked any real traction in either direction.  We continue to see support for this market around the $31.00 area and resistance coming in to play at $32.50 to $33.00.  Generally speaking, the major trend for silver continues to be negative based on our monthly Trade Triangle.  Our intermediate weekly Trade Triangle turned negative back on 11/17.  Long-term and intermediate term traders should continue to hold short positions in silver with appropriate money management stops.
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Suggested SILVER Trading Instruments:
Non Leveraged ETF’s: (Long SLV) (Short the ETF SLV)
Leveraged ETF’s: (Long AGQ) (Short ZSL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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GOLD (SPOT)
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QUICK TAKE: Trading Range
Combined Strength of Trend Score = -55
Monthly trade triangles for Long-term trends = Positive
weekly trade triangles for intermediate term trends = Negative
daily trade triangles for short-term trends = Positive
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The spot gold market has moved back to the midpoint of the Donchian trading channel, where it should begin to find resistance beginning at the $1,720 level and extending up to the $1,735.  Today’s Chart Analysis Score of -55 indicates that gold is stuck in a trading range.  Long-term traders should remain positive for this precious metal.  Intermediate term traders should be out of this market at the moment and on the sidelines waiting for a buy signal with the weekly Trade Triangle.
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Suggested GOLD Trading Instruments:
Non Leveraged ETF’s: (Long GLD) (Short the ETF GLD)
Leveraged ETF’s:(Long UGL) (Short GLL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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COPPER (MARCH)
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QUICK TAKE: Bear Trend
Combined Strength of Trend Score = -75
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
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The March copper contract has now moved past the midpoint of the Donchian trading channel and will begin to find resistance around the $3.45 level.  Our weekly and monthly Trade Triangles remain in a negative mode and we do not expect this rally has much further to go on the upside.  Generally speaking, the major trend for this metal continues to be negative.  As stated before, copper generally reflects economic conditions, and as such is influenced by equity prices.  Long-term and intermediate term traders should continue to hold short positions in copper with appropriate money management stops.
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Suggested Copper Trading Instruments:
Non Leveraged ETF’s: (Long JJC)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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CRUDE OIL (JANUARY)
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QUICK TAKE: Bullish Trend
Combined Strength of Trend Score = +90
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
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Attention, we are now tracking the January contract.  The January crude oil market jumped over the $100 a barrel level briefly today, before slumping back.  The rally pushed this market to the upper levels of its Donchian trading channel, where it found enough selling pressure to stop its upward momentum for now.  At the present time, both our monthly and weekly Trade Triangles remain in a positive mode, which is the direction of the major long term trend.  Resistance remains at the $100 level.  Long-term, Intermediate term should be long this market with appropriate money management stops.
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Suggested Trading Instruments:
Non Leveraged ETF’s: (Long USO) (Short the ETF USO)
Leveraged ETF’s: (Long UCO) (Short DTO)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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DOLLAR INDEX
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QUICK TAKE: Bull Market
Combined Strength of Trend Score = +85
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
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The dollar index, which closed extremely well last Friday, came under pressure today based on positive promises that things will be better in Europe.  If you have been reading our daily blog, you know we have been looking for a move to the $79.50 to $80.50 levels in this index.  Our first target zone was reached last Friday.  The overall trend continues to be positive and we would not be surprised to see this market continue to regroup to go higher.  Two of our three Trade Triangles are in positive mode, indicating that this market remains in a bull market.  Long-Term and intermediate term traders should maintain long positions with the appropriate stops in place.
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Suggested DOLLAR INDEX Trading Instruments:
Non Leveraged ETF’s: (Long UUP) (Short UDN)
Leveraged ETF’s: (Long) (Short)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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REUTERS/JEFFERIES CRB COMMODITY INDEX
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QUICK TAKE: Bear Trend
Combined Strength of Trend Score = -100
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
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The $305 level is now a key support level for this index and we expect we will see more backing and filling in this market.  We expect that a move back to the $313.00 level, which is the mid point of the Donchian trading channel, should offer enough resistance to halt any bear market rallies.   Resistance is evident at the $315-$320 levels, with support coming in between $300 and $305.  Our long and intermediate term Trade Triangles remain negative for this index.  Long-term and intermediate term traders should continue to hold short positions in silver with appropriate money management stops.
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Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF’s: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF’s: (Long) (Short CMD)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Chart Analysis Score: 50 – 65 Trading Range
Chart Analysis Score: 70 – 80 Emerging Trend
Chart Analysis Score: 85 – 100 Strong Trend

[Ed. Note: Adam Hewison is the president, chief executive officer, and a founder of INO.com, Inc. He is also the author of two highly-acclaimed guides to the forex markets: International Monetary Report and Right on the Money, the Definitive Guide to Forecasting Foreign Exchange Rates. Sign up for his FREE email Trading Course by clicking here now.]

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