The rip in crude oil continues to impress as price accelerates at its fastest pace since coming out of the low in December. This has attention on a pair of swing-lows developed last year. Gold continues to hold into its bid, appear to be working on maturing a wedge formation. The Dow is backing down into support while the S&P 500 builds a pattern that could lead the market strongly in either direction.
- Crude oil rally has price resistance in focus
- Gold is working towards top of would-be wedge
- Dow at support, S&P 500 rising wedge
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Crude oil rally has price resistance in focus
The past couple of weeks have brought with it the fastest rise in prices in oil since the initial squeeze out of the December low. This has the Feb ’16 trend-line, top of a multi-month channel, and 200-day broken, but the rally has brought into play a pair of important swing lows from the summer.
Yesterday, crude stalled at this important resistance and with oil overbought it is due for a pullback at the least. Price action has yet to give shorts the upper hand yet, so we will want to be patient here and see if sellers begin to show up in earnest.
It is reasonable to expect material weakness to set in at some point very soon, though. For those who have good prices from the long-side, considering buttoning up trailing stops at this juncture may prove to be a prudent move…
Crude oil Daily Chart (June/August lows in play)
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Gold is working towards top of would-be wedge
Gold got a nice boost from support and with that it is at the trend-line running off the February high. A wedge, descending in nature, is nearing maturity. A confirmed breakout in either direction is needed before running with a trading bias, but it could be soon. For now, risk will soon turn towards seeing another small turn down at the least as pattern resistance comes into play.
Gold Daily Chart (wedge coming into shape)
Check out the Q2 Gold Forecast for the intermediate-term fundamental and technical outlook.
Dow at support, S&P 500 rising wedge
The Dow is slowly backing down into support thus far, with a move below 25800 becoming concerning for longs. Three is trend-line and price support in the current vicinity above 26k to keep any eye on for now.
Dow Daily Chart (backing into support)
Check out the Q2 Equities Forecast for the intermediate-term fundamental and technical outlook.
The key to U.S. indices, though, isn’t the Dow but rather the S&P 500 as per usual given its broader influence. But its technical structure is also worthier of noting at the time than the other two major indices, the Dow and Nasdaq. The rising wedge discussed earlier could hold the keys to the next big move. Have to wait for the break before running with a bias…
S&P 500 Daily Chart (rising wedge forming)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX