Gold Daily Technical Outlook

Written by Oil N' Gold | Tue May 26 09 06:36 ET
Comex Gold (GC)

Gold's break of 950.1 minor support with 4 hours MACD crossed below signal line indicates that an intraday top is already in place at 963.1, ahead of 967.6 resistance. Outlook is turned neutral for the moment and some pull back might be seen. Nevertheless, another rise is still in favor as long as 915.2 support holds. Break of 967.6 will bring retest of 1007.7/1033.9 resistance zone. However, note that a break of 915.2 will indicate that whole rebound from 865 has completed and risk retest of this low.

In the bigger picture, the corrective structure of the fall from 1007.7 so far is consistent with the bullish case. That is, rise from 681 is resumption of long term up trend after triangle consolidation from 1033.9 completed at 681. Retest of 1007.7/1033.9 resistance zone should now be seen. Decisive break there will confirm long term up trend resumption. On the downside, while another fall cannot be ruled out for the moment, we'll hold on to the bullish case as long as 801.5 cluster support (61.8% retracement of 681 to 1007.7 at 805.7 ) remains intact.

Crude Oil Daily Technical Outlook

Written by Oil N' Gold | Tue May 26 09 06:35 ET
Nymex Crude Oil (CL)

With an intraday top in place at 62.27, crude oil's retreat from there might continues further but after all, downside is expected to be contained above 56.07 support and bring rally resumption. Above 62.26 will target 55 weeks EMA (now at 67.33). However, considering bearish divergence conditions in 4 hours MACD and RSI, break of 56.07 will indicate that a short term top is formed and deeper decline could then be seen to test channel support at 49.29.

In the bigger picture, whole medium term rebound from 33.2 is still in progress with crude oil staying well inside rising channel and above 55 days EMA. There is no sign of topping yet and such rally is still in favor to continue. Nevertheless, the main question remains on whether such rebound is resuming the long term up trend or is it merely correction to the fall from 147.27. In any case, medium term outlook will remain bullish as long as crude oil stays above channel support and further rally to 55 weeks EMA at 67.33 and 55 months EMA at 68.85 is still in favor even in case of pull back. However, note that failure to sustain above the mentioned EMAs, followed by break of the channel support, will suggest that rise from 33.2 has completed and will turn outlook bearish for a retest of 33.2 low.

Minor Wave Cycle for Major Currency Analysis

By Ahmad Mudjo

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Special Report: Stock Market Trend Confusion and U.S. Dollar Crackdown

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U.S. Dollar: Are We Seeing Evidence of a Turn?

Jim Martens, Elliott Wave International's Senior Currency Strategist, regularly posts thoughts on the business of forex trading for his subscribers. Below is Jim's latest Market Insight, posted on the morning of May 22:
You've heard me say a million times both in my forecasts and weekly videos that in proper Elliott wave analysis, wave structure of a market move trumps wave measurements every time. Proportions between waves are important, but it's only when both the wave structure is completed and a measurement is approached that a wave pattern is coming to an end.Let's consider the present situation with the U.S. Dollar index as an example. Looking at the big picture, the Index is approaching the point where the decline from March will consist of three waves, with two of them (the ones pointing down) being equal.


















Both of those characteristics -- a three-wave move with first and last legs equal -- are traits of corrective Elliott wave patterns. That warns us to look for evidence of a bottom in the DX. The ideal piece of evidence would be an impulsive (5-wave) rally from a low, followed by a corrective (3-wave) setback. That would also give us a price level (the low) that, if crossed, would signal that the idea of a turn is incorrect -- something you could use for good money management.What's lacking so far today (May 22) is that impulsive rally. But the Index does show a likely five-wave decline sequence from 83.22, complete with a potential bullish divergence accompanying the ostensible fifth wave.

Let's break it down market-by-market. The euro represents a stout 57% of the Dollar Index, and it has satisfied our upside expectations by pushing the EUR/USD above $1.3736. The USD/CHF reached its measured objective ($1.0939) earlier this week. Sterling has been strong. So, does the market show evidence that a bottom may be near? We are seeing signs of that, but as of this moment, all of the dollar's competitors are still pushing against their highs, so we are left riding the dominant trend (i.e., dollar weakness) until there is actual evidence to the contrary.

Moving beyond charts, my subscribers know that I always start my morning intraday comments by reviewing the big picture. I also keep an ear tuned to the financial news. I'm not so much interested in what they think about the markets as I am in the topics being discussed. Lately, it's been the dollar. There is a growing concern that with the dollar at its lows for the year, it may become more difficult for the U.S. to issue bonds to fund our enormous deficit. Add to that all the talk of replacing the dollar as the world's reserve currency -- and there is plenty to keep these discussions going. But isn't it interesting that this coverage has been increasing as the U.S. dollar pairs are reaching their measured price targets? As these discussions increase even more, we'll be watching for evidence that "the dollar concern" has reached a peak. At that time we will want to be contrarians. But for now, it's wave structure, structure, structure.