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Monday, October 15, 2012

Comparison of S&P 500, Russell 2000, Gold, and Oil

I thought I'd look at the S&P 500 and Russell 2000 Indices, Gold, and Oil to compare where they are trading on a 1-Year Daily timeframe relative to their 50 sma and on a 3-Year, 1-Year Daily, and 11-Day timeframe relative to each other.

The first chartgrid shows a 1-Year timeframe, with the SPX and RUT trading around their 50 sma, Gold is above its 50 sma, and Oil is below its 50 sma. The second chartgrid shows a 2-Month close-up shot, with today's recovery into the close on the SPX, RUT, and Oil. Gold closed near today's low. While the SPX and RUT have made a new high during the past year (which is serving as near-term resistance, thus far), Gold and Oil have not. The triple top on Gold at 1800 is serving as major price resistance, while the 100.00 level is holding as major price resistance on Oil (with the 50 sma holding as near-term resistance at 93.96).



The 1-Year percentage lost/gained graph below shows that the SPX leads in percentage gained, followed by the RUT, Oil, and Gold.


The 1-Year comparison chart below shows that, on a relative-strength basis and in price-action format, the SPX has gained the most over the past year, followed by the RUT, Oil, and Gold.


However, when we look at a 3-Year comparison chart, we see that Gold is, by far, the leader, followed by the RUT, SPX, and, finally, Oil.


Finally, this last comparison chart shows price action for the month of October, thus far. Gold has seen the most profit-taking, while the SPX, Oil, and RUT have seen the least and have turned up slightly the past two days. Whether this is an indication that traders are taking profits in Gold to fund further buying in equities and, possibly, Oil, remains to be seen. This can be tracked over the next few days/weeks for confirmation of such a scenario.


In any event, the 50 sma is having an impact on price action on the SPX, RUT, and Oil. Should all four instruments break and hold below this moving average, we'll likely see a correction in equities and commodities, in my opinion. I'll be looking for confirmation of this in short-term price action on the OEX, DBC, the U.S. $, and 30-Year Bonds, as mentioned here and here.