{"id":31168,"date":"2012-07-26T17:26:21","date_gmt":"2012-07-26T21:26:21","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=31168"},"modified":"2012-07-26T17:26:21","modified_gmt":"2012-07-26T21:26:21","slug":"sp500-russell-2k-dollar-index-and-golds-fake-out-or-shakeout","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/07\/26\/sp500-russell-2k-dollar-index-and-golds-fake-out-or-shakeout\/","title":{"rendered":"SP500, Russell 2K, Dollar Index and Gold\u2019s \u2013 Fake out or Shakeout"},"content":{"rendered":"

By JW Jones, OptionsTradingSignals.com<\/strong><\/a><\/span><\/p>\n

Today has been quite a trading session with risk assets rocketing higher after Mario Draghi of the European Central Bank reiterated what has already been stated. The S&P\u00a0500 Index (SPX)\u00a0is posting some nice gains, but price has not taken out the recent ascending trendline illustrated in the daily chart of SPX shown below. Until that ascending trendline is taken out, the bears remain in control of the price action.<\/p>\n

S&P\u00a0500 Index (SPX)\u00a0Daily Chart<\/strong><\/p>\n

\"SPX<\/a><\/p>\n

Today\u2019s rally has certainly served to work off short term oversold conditions. With the first GDP\u00a0estimate for the 2nd Quarter scheduled for tomorrow things could get interesting. In the meantime, the closing price today is key. My expectation is that we will not see the S&P\u00a0500 Index push back above the ascending trendline today. For the price action to flip back bullish, we need a much stronger than expected GDP\u00a0result tomorrow.<\/p>\n

Another key daily chart which helps provide support that the bears remain in control of the price action is the Russell 2000 Index (RUT). The RUT\u00a0has given back roughly 50% of its entire move and at this point has failed to even regain the 200 period moving average on the daily chart. Price action would need to climb over 20 points to simply backtest the breakdown level illustrated below.<\/p>\n

Russell 2000 Index (RUT)\u00a0Daily Chart<\/strong><\/p>\n

\"IWM<\/a><\/p>\n

As long as the RUT\u00a0holds below the key rising trendline, the bulls must be questioned. However, should the S&P\u00a0500 Index and the RUT\u00a0push back above the ascending trendlines on their daily charts I\u00a0will become much more constructive regarding the short to intermediate time frames for risk assets.<\/p>\n

The other key chart of the day can be found no further than the U.S. Dollar Index futures. The U.S. Dollar Index futures absolutely collapsed today and move all the way down to test the 50 period moving average on the daily chart. So far, the short-term rising trendline has offered support along with the 50 period moving average and the Dollar has bounced sharply higher.<\/p>\n

U.S. Dollar Index Futures Daily Chart<\/strong><\/p>\n

\"UUP<\/a><\/p>\n

 <\/p>\n

As long as price holds above the short-term rising trendline, the Dollar will be able to continue to push higher from this level. Should a breakdown occur we have even more support below around the $81 price level. After a move this strong, it could take days and maybe even weeks for the Dollar to regain its footing. However, the forthcoming Federal Reserve announcement next week will likely seal the Dollar\u2019s fate.<\/p>\n

Gold and silver futures are both trading nicely higher on the session in light of the weaker Dollar. However, both precious metals have faded later today as the Dollar started to drift back to the upside. Gold and silver are trying to breakout, but we need to see some continuation before I\u00a0intend to get involved.<\/p>\n

Gold Futures Daily Chart<\/strong><\/p>\n

\"Gold<\/a><\/p>\n

Sometimes weak breakouts in price action can lead to ugly reversals. I\u2019m not suggesting that a failed breakout will occur in gold and silver futures, but I\u00a0remain cautious as the breakout so far does not have me totally convinced. Volume in silver is not spiking like it should be and gold volume is also weak considering the\u00a0possibility that major breakouts are taking place.\u00a0\u00a0Another element that is simply not confirming with strong price action or volume is the gold miners. On a day like today, all that they can muster is a relatively small gain on super light volume. Caution is warranted!<\/p>\n

Oil futures are also not shooting considerably higher even though the Dollar remains under pressure. To me, today seems like it could be a misdirection day based on the price action and lack of volume we are seeing to the upside in hard assets like gold, silver, and oil. In addition, volume in the major equity indices and futures is super light. For now, I\u00a0am going to remain cautious and will likely look to avoid taking on any major risk until the dust settles on the GDP\u00a0number and the Fed\u2019s future decision. Sometimes sitting in cash is not so bad afterall!<\/p>\n

Simple ONE Trade Per Week Trading Strategy?<\/strong>
\n<\/strong>Join\u00a0OptionsTradingSignals.com<\/strong><\/a> today with our 14 Day Trial<\/strong><\/h3>\n

Jw Jones<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By JW Jones, OptionsTradingSignals.com Today has been quite a trading session with risk assets rocketing higher after Mario Draghi of the European Central Bank reiterated what has already been stated. The S&P\u00a0500 Index (SPX)\u00a0is posting some nice gains, but price has not taken out the recent ascending trendline illustrated in the daily chart of SPX … <\/p>\n

Continue reading “SP500, Russell 2K, Dollar Index and Gold\u2019s \u2013 Fake out or Shakeout”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-31168","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=31168"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31168\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=31168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=31168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=31168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}