Friday, 11 October 2013

Gold daily chart - channeling lower, nearing test of key support

Silver daily chart - testing trend line support

NASDAQ 100 daily chart - retesting underside of broken up trend line

GBP/USD weekly chart breaking long term support, daily stuck between support and resistance



Dow daily chart - big rally last night, but technical indicators mixed

US stocks rallied strongly last night, resulting in much jubilation and more than a few proclamations that new record highs are on the way. The charts urge caution, as the daily chart technical picture is mixed. For example while the Dow has rallied from trend line support, it remains (bearishly) below key moving averages, and a measure of momentum (MACDH) remains negative. Add to that seasonal factors, remembering that those influences in early and mid October are bearish. As I tweeted earlier "How many big one and two day stock market rallies in the month of October are erased within days? I don't have stats, but gut says most".

Given all the above, what's a trader to do? You'll have your own plan, but me I'd be looking to trade a market where the technicals are less mixed.

I continue to use the Dow as a proxy for the broader US stock market, as it is currently showing the neatest trend lines and channels.