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The price of gold turned lower the past couple of sessions from a thicket of resistance carved out during 2016 along the widely-watched 2011 trend-line at that time. There is also a trend-line coming across from 2013. But what is interesting, and this was discussed in a piece written yesterday, is the positioning profile in the futures market (via the COT report) indicates a situation where buyers have gotten ahead of themselves. While this might not be an ominous sign, history does suggest that the top-side could be capped for a while. Looking at silver, if gold isn’t likely to keep on chugging along, then neither is it.
Crude oil is a volatile day-to-day mess, but more broadly the view is still that a rounding top is being put in place and that at some point we will see the 30s visited again. But from a tactical standpoint, all short-term maneuvers need to be made with in mind that price reversals are happening frequently and booking solid trades is a prudent approach until a cleaner trend emerges.
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We focused on the DAX & CAC 40 today, given their substantial breakouts above key levels/lines yesterday. There is room to run for these indices, especially if risk appetite continues to remain firm. A higher euro is clearly losing its impact and should it experience a sell-off it will likely further help the bullish case. The FTSE is stuck in a range and so it remains off the radar for now. The S&P 500 closed to a new record high yesterday, and we’re now looking to 2500 and then up to 2520 or so. The Nasdaq 100 looks poised to continue higher out of a recently broken bull-flag.
For full technical considerations, please see the video above…
---Written by Paul Robinson, Market Analyst
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