Tuesday, October 9, 2012

Oil Printing Another +3%-Day

In short about today's market action: price went down hard about an hour into the session and couldn't bounce of the lows. A close near the lows at the end of the day is bearish and mainly tech is seeing a lot of distribution. Another bearish signal is the break lower out of the bear flag in the small cap-index.

All these signals are telling us to be careful and remember, cash is also a position.

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Euro, oil, metals
Oil had a very good day, showing strength when everything else was going down.

This is the third day with bullish action in the last 5 trading days for oil. Last Thursday, oil bounced hard on the 88-level and almost printed a bullish engulfing candlestick. Yesterday, there was a hammer and today another big up-candle.

This indicates higher future prices, many analysts are pointing towards Iran-tensions as the cause of all this. There are also tensions between Syria and Turkey, another possible reason for the recent action in oil.

Just like yesterday, copper was relatively strong, compared with gold, silver and the major indices.

The euro is back under 1.29 and 1.28 will be the next level to watch. If that doesn't hold, we'll probably see 1.25 back before the end of the month.

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