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S&P 500, Gold Technical Positioning Warns of Weakness Ahead

By , Currency Strategist
08 October 2012 03:57 GMT

THE TAKEAWAY: S&P 500 technical positioning warns of ebbing bullish momentum while gold prices have carved out an outright bearish reversal signal.

S&P 500 – Prices put in a Spinning Top candlestick below resistance at 1466.10, hinting a move lower may be ahead. Initial trend line support is at 1449.80, with a break below that exposing 1422.40 and the bottom of a rising channel set from early June (1416.00). Alternatively, a push above resistance targets the channel top, now at 1493.90.

SP_500_Gold_Technical_Positioning_Warns_of_Weakness_Ahead_body_Picture_5.png, S&P 500, Gold Technical Positioning Warns of Weakness Ahead

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL A burst of seesaw volatility has left prices locked between support at 87.70 and resistance at 92.56, the 38.2% and 23.6% Fibonacci expansions respectively. A break above resistance exposes the underside of a rising channel set from early July, now at 97.03. Alternatively, a drop through support targets the 50% expansion at 83.76.

SP_500_Gold_Technical_Positioning_Warns_of_Weakness_Ahead_body_Picture_6.png, S&P 500, Gold Technical Positioning Warns of Weakness Ahead

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices put in a bearish Dark Cloud Cover candlestick pattern below resistance in the 1790.55-1802.80 area, hinting a move lower is ahead. Negative RSI divergence reinforces the case for a downside scenario. Sellers are now probing below rising trend line support set from mid-August, with a confirmed break on a daily closing basis exposing the 23.6% Fibonacci retracement at 1747.20. Alternatively, a break above resistance targets 1850.00 and the 1900/oz figure.

SP_500_Gold_Technical_Positioning_Warns_of_Weakness_Ahead_body_Picture_7.png, S&P 500, Gold Technical Positioning Warns of Weakness Ahead

Daily Chart - Created Using FXCM Marketscope 2.0

Want to learn more about RSI? Watch this Video.

US DOLLAR Prices put in a Bearish Engulfing candlestick pattern below resistance in the 9928-38 area, hinting a move lower may be ahead. Initial rising trend line support is at 9812, with a break below that exposing the September 14 close at 9773. Alternatively, a push above resistance targets the top of a falling channel established from the June 1 swing high, now at 9957.

SP_500_Gold_Technical_Positioning_Warns_of_Weakness_Ahead_body_Picture_8.png, S&P 500, Gold Technical Positioning Warns of Weakness Ahead

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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08 October 2012 03:57 GMT