Stocks have seen a bit of a boost in recent trade, but generally still look sluggish as weakness may soon be ready to kick in again. The Dow Jones has a bigger picture pattern coming into view, the DAX has important trend support to watch. Crude oil contracts are looking vulnerable here as key technical developments point to a decline towards important support levels. Silver looks like it has a fairly clean path to the 14-area.
- Dow Jones and DAX could soon come under pressure again
- Crude oil contracts could weaken towards recent support or worse
- Precious metals vulnerable to selling, silver may soon be at 14
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Dow Jones and DAX could soon come under pressure again
The Dow Jones is bouncing around a bit after tagging the 200-day MA, but still looks vulnerable to weakness in the near-term as the move off the recent low isn’t particularly powerful. Near-term resistance clocks in 25957, while support at Monday’s low of 25560, followed by the 200-day at 25432.
With some more time a head-and-shoulders pattern could develop, with its beginnings starting back at a peak created in February. This is only a scenario at this time with the right shoulder needing some more work and then of course needing the neckline broken for validation. More to come on this should it become relevant…
Dow Jones Daily Chart (resistance, range)
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The DAX is still maintaining the integrity of its uptrend since December with the help of a trend-line in place since then. Any turn down from here will use that line as an important point of support along with the 11844 level. A hold keeps the uptrend intact, while a breakdown could be a sign of a changing trend. For now, support is support until it isn’t.
DAX Daily Chart (resistance, range)
Crude oil contracts could weaken towards recent support or worse
WTI is turning down from the February 2016 slope, but has near-term support with the help of a parallel in place since early this year. A break below this threshold will quickly bring the May 6 low at 59.98, with the 200-day effectively in confluence only 31 cents higher. A break below that powerful reversal-day low should have oil rolling downhill further.
WTI Crude Oil Daily Chart (59.98 holds the key)
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Brent crude oil posted a solid reversal candle at the underside parallel dating back to January and at the trend-line running down off the October peak. Looking lower the 200-day and May 6 low are about 10 cents apart, with 69.12 as the level needed to be broken for further weakness towards the Feb 2016 slope.
Brent Crude Oil Daily Chart (reversed off resistance)
Precious metals vulnerable to selling, silver may soon be at 14
Gold is teetering just under the August trend-line, which if broken cleanly and has price undercutting 1266 is likely to see silver continue leading the way lower. From here, silver has a pretty clear path to under 14, where the 2018 low and trend-line from 2015 reside. To turn things bullish a rise above the February trend-line is needed.
Silver Price Daily Chart (14 looks to be next)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX