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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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Monday, December 05, 2011

Higher Gaps on Declining Volumes...YM, ES, NQ & TF

Below are 30-minute (market hour only) charts of the YM, ES, NQ & TF. We can see a series of gaps from November 21st...I mentioned these gaps in my post of December 1st...at some point, they'll have to be filled. At the moment, price is sitting just above the 50 sma (red)...I've shown a Fibonacci retracement and Fibonacci fan lines...should price retrace from here, it could, theoretically pull back to the 38.2% retracement level, which, at the moment, lines up with the 200 sma (pink) and 50% fan line level. Declining volumes are highlighted by the red arrow.

Below is a 4-hour chart of the EUR/USD. It has failed to hold above 1.35 on its recent attempts. It's a major resistance level that will need to be re-captured and held...continuing weakness in the Euro may signal a decline coming in the U.S. equities markets.

Below is a 4-hour chart of the Commodities ETF, DBC. It  has failed to  hold above major resistance at 27.80...also an important level that will have to be re-captured and held if the equities markets are to continue advancing.

Below is a 4-hour chart of AUD/USD. A drop and hold below a major support level of 1.02 could also signal weakness for equities.

Below is a 4 -hour chart of the VIX. A rise above 30.50 could bring in large, volatile down drafts in the S&P 500.

If weakness persists in commodities and the Euro & Aussie $, I'd say the markets are looking toppy here and may be due for a pullback...or even a violent drop. At the moment, declining volumes are not confirming a further advance in equities, as the U.S. $ firms.

Also, how the markets react to this article regarding Standard & Poor's threat today to downgrade the credit rating of 15 Eurozone countries (including Germany and France) is something I'll keep in the back of my mind: http://finance.yahoo.com/news/p-puts-15-eurozone-countries-214652756.html;_ylt=Aix2m3y_uP9yg7uEq_0GZXn2uYdG;_ylu=X3oDMTQ3MW5rZHNzBG1pdANUb3AgU3RvcnkgTGlzdCAgTm8gQ29sbGVjdGlvbgRwa2cDMjgxMzUwNjktOWM4MC0zYzAwLThlODMtYTRiODc5NDEyNTBkBHBvcwMzBHNlYwN0b3Bfc3RvcnkEdmVyA2U2Yjc1NTkwLTFmOGQtMTFlMS1iN2RlLTdiMzg1MDM3YjZmOA--;_ylg=X3oDMTFrM25vcXFyBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdAMEcHQDc2VjdGlvbnMEdGVzdAM-;_ylv=3