Tuesday, September 25, 2012

Mon, Sept 24: /GC, /SI, GOOG

Markets closed slightly lower today (Monday, Sept 24). The S&P500 was off by 0.2 percent, while the NASDAQ underperformed due to a 1.3% dip in Apple shares, that index's highest-weighted component.

Precious metals are hinting at consolidation or perhaps even bearish moves after their heady advance of the last month, fueled by QE3. The gold futures contract (/GC) today closely hugged the lower support line of its 1-month price channel, usually a precursor of a shortly forthcoming violation.

/GC. Aug 20 to present. Hourly candles.

Meanwhile, the silver futures contract (/SI) has already today violated its 1-month price channel. An extension of the lower support line of the channel currently stands at about $34.9; thus a throwback to this channel support line, if it should occur in the next ten or twenty hours, may encounter resistance near the $35 level. ('Throwbacks' were discussed in this blog's Aug 28 post, for those wanting a refresh.)

/SI. Aug 20 to present. Hourly candles.
Perhaps the most notable price action today among widely tracked large caps belonged to Google (GOOG). Today's 2.1 percent rally brought the security to over $120 above its 200-day simple moving average, a level of bullish sentiment not seen in 20 months. Moreover, today's close places GOOG just a hair above the resistance of a price channel stretching back to January 2010. The channel is not robustly defined, however -- for instance, the upper resistance line has been untested since its inception, and the slope of the channel could be adjusted upward to fully enclose the lows of July 2010. As such, the trader should discount the channel's bearish implications, at least temporarily.

GOOG. Sept 2008 to present. Daily candles.