A Quick Quad-Market Assessment of the Selloff Thursday
Feb 4, 2010: 11:28 PM CSTWith all major markets falling sharply on Thursday, I though it would be a good idea to take a quick “fly-by” glance at the daily charts of the S&P 500, Gold, Crude Oil and then the US Dollar Index.
Let’s start with the S&P 500:
A quick glance shows the “Cradle” sell signal was accurate, as I highlighted in yesterday’s post:
“Overhead Cradle Resistance in the S&P 500.”
What now? The 20 and 50 day EMAs have officially crossed ‘bearishly,’ and the S&P 500 cracked under the critical 1,070 and 1,080 support zone.
A quick glance shows that the next level of likely support rests with the October and November 2009 lows in the 1,020 and 1,030 region.
Next, Gold Daily:
Gold had another $50 point loss today, similar to that of December 4th (ironic one-month anniversary).
Gold also broke the critical $1,070 support zone I highlighted in a prior post:
“Critical Line in the Sand for GLD/Gold“ (sellers broke the critical level)
It would appear that odds favor a completion of the Bear Flag (blue line) in Gold down to the $1,020 level (ironically, similarly to the S&P 500 index level). Again, that is a quick chart assessment.
Crude Oil:
The $72.00 level in Crude Oil represents a critical level not yet (officially) broken, though should sellers push price down two more dollars, then the essential support line at $70.00 would come into play.
A break under $70.00 would target the $65.00 level – September’s swing low.
Crude Oil – like the S&P 500 – also formed a Cradle Sell Signal on the short-lived rally back to the $77.00 area (notice the doji that formed at that level).
The US Dollar Index:
Finally, the US Dollar Index looks solidly to be on trajectory to complete its daily bull flag, as also mentioned in:
“Bull Flag Formation in the US Dollar Index”
and
“Dollar Index Update: A Bump in the Road to Complete the Bull Flag?”
The $80.50/$81.00 level reflects both the Bull Flag completion target and a prior level of overhead resistance from July.
Continue watching these levels across these important markets.
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Corey Rosenbloom, CMT
Afraid to Trade.com
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