Wednesday, October 26, 2011

Stocks and Commodities Update

Click on Chart to Enlarge

Based off of a couple chart pattern projections the minimum expected price target has already been met on this rally. Basically the lower range was the low 1250's and the high is around 1275. The daily stochastics is overbought and the weekly 8,3,3 stochastics is almost overbought, so we are close to dual time frame overbought momentum. Another poke up on the hourly chart would push the hourly momentum to overbought as well giving multiple time frames of momentum as overbought.

Based on the structure of the advance off the Oct 4th low, this looks like a complex upward pattern that may complete a second phase advance in the next 1-2 days. The gap down at the 61.8% retracement of the May-Oct decline is still unfilled just overhead. So it would be nice to see that filled in the next day or so, and then possibly we will see a pullback, possibly a significant top, though there is no great reason at this point to expect a top other than price pattern and retracement levels.

Click on Chart to Enlarge

If commodities are to continue a downtrend, the correction upward thus far has been right in the range (red box on chart) to see a measured correction based on the other upward corrections in the downtrend. There is some bearish divergence on the daily stochastics at the fill of a major gap down, so this could be a reversal zone.

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