market commentary 1may11

8/7/2019 Market Commentary 1May11

1/12

Andys Technical Commentary__________________________________________________________________________________________________

DXY - Monthly (Log) If the Dollar starts taking out the supports cited on the previous slide (75.63 and 74.13), then this will beour longer term count. The DXY would take out the all time low in a Intermediate Wave (V) of -C-. Thiscount would probably mean a sub-70 on the DXY in the next several months. The good news is thatthe proposed -C- wave here had an extended Wave (1), which means that the final Wave (V) will beshortest leg of the pattern down

( A )

a

b

Plaza Accord

- A -

- B -( C )

c( B )

( I )

( II )

( III )

a

b

c

d

e

( IV )

( V )

- C -

REPRINTED from 3/6/2011


2/12


DXY - Monthly Several weeks ago, this bearish wave count was highlighted because of the punk price action of theGreenback. This count would now have to considered preferred. The implication here is that theDXY will take out the 2008 lows (70.70). The current Wave (V) cannot be larger than Wave (III), whichwas exactly 61.8% of Wave (I). So, as bad as the Dollar looks, it will not go below 60.00 (Hooray forus!). My guess would be that it bottoms well before then, probably in the 67-68 zone.

( A )

a

b

Plaza Accord

- A -

- B -( C )

c

( B )

( I )

( II )

( III )

a

b

c

d

e

( IV )

( V )

- C -


3/12


DXY - Monthly (Log) Its interesting to observe the massive falling wedge look to this 30+ Year Pattern

Chartists will be paying attention to this line.

A new low on price will certainly trigger Monthly RSI Divergence


4/12


DXY - Weekly w/RSI An Intermediate Wave (IV) probably concluded at 81.31. The preceding waves (!) and (III) tookabout two years to complete. I dont expect this potential Wave (V) take as long, because it willbe the smallest wave of the set, but we may not see a real bottom on the DXY until the middle of2012--maybe it coincides with the Election?

a

( III )

b

c

d

( IV )e

81.31

1

2

5

( V )

4

The Weekly RSI hit a fresh low last week, so it certainly indicates an

oversold condition. Perhaps we see a bounce back from the 2008 lows

(~70.70), but the fact that were seeing a NEW low on RSI is not longer

term bullish.


5/12


S&P 500 ~ Daily non-Log Scale

1040

x

d

c

yg

1344

With the way the market held an exact 50% retrace last week (wave -b-) and thenlaunched higher, it seems poised to break out to new highs this week. The count that fitsbest would be an irregular b-wave that targets either 123.6% or 138.2% of Wave-a.Those levels would be 1367 or 1380.

The apparent inverted head and shoulder or cup and handle set up should give thebulls all the psychological firepower they need to break this market above 1344 aseveryone will be a buyer above 1344.

c

x

e

f

a

b

a

b-c-

-a-

-b-



6/12


S&P 500 ~ Daily non-Log Scale

1040

x

d

c

yg

1344

Last Sunday, I wrote the following at traders-anonymous.blogspot.com:It seems

like a higher probability event that we will take out 1344 sometime this week. Thewave count, though, suggests that if we do break to new highs this week, it will

likely be a "bull trap" as there is a zone of technical resistance between 1367 and

1380.

I still like the concept of a failed Inverted Head andShoulder as there seems to betoo many people discussing the idea. The market cozied up to last weeks targetresistance of 1367, but has shown no sign of peaking. Although that makes me abit nervous, I still like the 1367-1380 zone to provide resistance.

c

x

e

f

a

b

a

b-c-

-a-

-b-


7/12


S&P 500 ~ 60 Min. with Weekly Support and Resistance

The bulls gained all the advantage last week, with 1344 appearing to bethe lone hurdle. That gap down at 1312 is probably bothering a few ofthem. The lines presented here are First andSecond levels of supportand resistance for the week ahead. 1344 will be likely be a tougher nutto crack on Monday, but its a level that probably gets taken out thisweek. Bulls would not want to see any price action below 1312 andcertainly not 1294.

Double Gap!



8/12


S&P 500 ~ 60 Min. with Weekly Support and Resistance

Last weeks resistance at 1344 becomes this weeks first level of support.Bulls do not want to see any action below the 1338-1344 zone as the marketwill skid fast down to the gap at 1313, a gap which will be filled some day. Anew high early in the week will trigger short term RSI Divergence which shouldlead to a mid-week pullback. Nimble (short term) traders can try buying adip in front of 1344 and running a stop at 1337.

Double Gap!


9/12


Gold: Weekly Continuation (Log Scale)

This perfect trendline up has been highlighted the last several weeks. There is asimilar cup and handle message as there was onSilver: Were near a targetand psychological level of $1500, but nothing about this chart says Short Me."

Bulls should use $1,425 and $1,375 as MonthlySupport points. Breaks of these levels would start to

inflict major technical damage on this picture.

Would not short/sellthis market until this

line gets broken



10/12


Gold: Weekly Continuation (Log Scale)

The gold message has been the same for a few months now. Its been chanellingperfectly higher. I wouldnt own this market because it does have a mania/bubblefeel to it. The bias is that there will be more money made in shorting gold once wehave our blow off day then attempting to own gold waiting on a blow off top.

This current move is beginning to look and feel a big long in the tooth.

Bulls should keep using $1,425 as a Monthly Supportpoints. I know that seems like a level way down there,but we were just there last month. Real technical damagewill not be done until $1,425 gets violated.

Would not short/sellthis market until this

line gets broken

Another triangleset up here.


11/12


July Silver Futures (Daily)

The only thing thats worth pointing out withSilver is that it seems to be getting much morevolatile. Check out the wide ranges of the recent candlesticks relative the narrower rangesbefore. Markets become morevolatile at theend of trend. With that stated though, it looks

like were witnessing another triangle development. There is still no point in attempting to shortthis market until we see either:

A) A blow off move where Silver rallies 5-10 bucks in one day and then collapses; or,B) The announcement of some big hedge fund that has stopped out and/or gonebankrupt due to a short silver trade.


12/12

DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of anykind. This report is technical commentary only. The author is NOTrepresenting himself as a CTA or CFA or Investment/Trading

Advisor of any kind. This merely reflects the authorsinterpretation of technical analysis. The author may or may nottrade in the markets discussed. The author may hold positionsopposite of what may by inferred by this report. The informationcontained in this commentary is taken from sources the authorbelieves to be reliable, but it is not guaranteed by the author as tothe accuracy or completeness thereof and is sent to you forinformation purposes only. Commodity trading involves risk and is

not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC)has said about futures trading: Trading commodity futures andoptions is not for everyone. IT ISA VOLATILE, COMPLEX ANDRISKY BUSINESS. Before you invest any money in futures oroptions contracts, you should consider your financial experience,goals and financial resources, and know how much you can affordto lose above and beyond your initial payment to a broker. Youshould understand commodity futures and options contracts andyour obligations in entering into those contracts. You shouldunderstand your exposure to risk and other aspects of trading bythoroughly reviewing the risk disclosure documents your broker isrequired to give you.

Wave Symbology

"I" or "A" = Grand SupercycleI orA = Supercycleor = Cycle-I- or -A- = Primary(I) or (A) = Intermediate"1 or "a" = Minor1 or a = Minute-1- or -a- = Minuette(1) or (a) = Sub-minuette[1] or [a] = Micro[.1] or [.a] = Sub-Micro

market commentary 1may11

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