Friday, August 17, 2012

Thurs, Aug 16: GC, CL, DLTR, S

A few notable charts of Aug 16 market action beg for sharing, and no matter that I'm scribbling together these few words just before the market open on the 17th.

Gold futures (GC) are setting up for a potential appreciation. The one-year, daily candles chart shows that the contract is nudging against a complex, three-lined price channel that stretches back to the market peak in September of last year. A break higher above the channel is likely, although it may spawn only a limited rally if Bernanke and Trichet fail to turn on the QE spigot. They'll be making the annual pilgrimage to Jackson Hole at month's end, and the coiling GC price action may be, in part, a reflection of this.

GC. July 1, 2011 to present. Daily candles.
Light sweet crude oil futures (CL) may be reaching the exhaustion point of their six-week rally, as suggested by two pieces of evidence. First, price is reaching a "kiss of death" with a moderately-defined, four-year price channel. The KoD occurs when price violates a trendline, as happened with CL in May of this year, and then comes back to touch it. Second, the KoD would coincide quite closely with the 200-day simple moving average and with a 61.8% Fibonacci retracement from the June low to the February high. 

CL. August 2008 to present. Daily candles.
For a final chart, consider Dollar Tree (DLTR), a NASDAQ-100 component. Shares are in a prodigious four-year rally, although they took a heavy, high volume stumble on the 16th. And where did the intra-day low fall? -- on the four-year price channel, to the penny.

DLTR. August 2008 to present. Daily candles.
Stop the presses; one more chart. Following up on the depiction of Sprint Nextel (S) in the post of August 13, here's how action has proceeded to play out. Allow this morsel of self-congratulation: the advance halted at $5.49, brilliantly in accordance with my call of "just below $5.50".

S. August 2008 to present. Daily candles.