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Bears and Bulls Battle for Domination

Hello MarketClub members everywhere. Choppy, choppy, choppy that’s the only way to describe the recent market action as the Bears and the Bulls battle each other for domination.

 

By Adam Hewison

 

It reminds you of the election and the fight between the Democrats and the Republicans. Eventually, there will be a direction and a trend both politically and financially. My job here at MarketClub is to help you determine that trend and get on the right side – I am of course referring to the financial markets and not the politics of today.

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Indexes: All of the major indices still have their long-term monthly Trade Triangles intact. The intermediate trend based on the weekly Trade Triangles is down which is reflecting the choppy action that we have seen the last few days. What is interesting is if you look at the weekly charts and the weekly RSI you can see that all of the indices are above the 50 support line indicating that the trend is likely to resume to the upside. However, there are no guarantees and I will rely on the weekly Trade Triangles to tell me when to get back on the long side of the market again.

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Gold (NYMEX:GC.Z16.E): Looking at the gold (NYSEARCA:GLD) markets we can see that gold is stuck in a very broad trading range. Based on the December futures contract that broad range is defined as $1,357 on the upside and $1,305 on the downside. Like the major indexes, the weekly gold RSI indicator remains above the 50 line indicating the potential resumption of the uptrend. Our super-long indicator, the monthly Trade Triangle remains in a positive mode indicating that the longer-term trend for gold remains positive.

Crude Oil (NYMEX:CL.V16.E): It is a very mixed picture for this commodity with a conflict between the daily and weekly Trade Triangles. This type of conflict reflects a trading range which is pretty much where we are right now in crude oil(NYSEARCA:USO). At the moment I see very little to get excited about in this market and prefer a sidelines position.

One thing I will be watching very closely this week is how the indexes close on Friday. At the moment the S&P 500(NYSEARCA:SPY) index is unchanged for the week based on the close on Tuesday. Should this index close higher for the week it could be the first clue that a low has been put in place for this market. The same would apply for both the Dow and the NASDAQ.

In today’s video update, I will be looking at all of these markets and analyzing areas of interest and concerns.

Stay focused and disciplined.