Thursday, August 25, 2011

Resistance around SMA 120

Intermediate time frame remains slightly bearish with EMas almost touching but no crossing and market unable to climb above resistance around SMA 120.

Otherwise, on longer time frames, market remains bearish with or without today's move. One indicator I didn't show you for a while is MACD. I did't show it because the "buy"/"sell" signals by MACD (on daily chart!!!) are similar with those generated by EMAs crossing on hourly chart. As a rule, MACD is a little bit more sensitive than EMAs crossing meaning that it sometimes it gives better buy or sell signals but it also generates at least twice as many whip-saws. MACD on daily chart shows a weak "buy" signal at the moment. However on weekly chart MACD looks extremely bearish so I don't advise you to get too bullish right now. One thing I noticed is that you can trust a buy signal generated by MACD if the MAs are crossing bellow the "zero line" (especially on weekly charts) or a sell signal if the MAs are crossing somewhere above the "zero line".

The dollar gives signs of bottoming. It's now close to its lowest level ever but it didn't make any lower low since May. Of course if Feds decide that a new QE is necessary, dollar will plunge and gold and silver will rocket again. However, from gold moves I think traders are not heavily betting on a QE3. This remains to be seen.

All the best!


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