So what will this mean to the markets?
So far, President Obama’s words have not helped the markets in the past. It remains to be seen what is going to happen to gold, the equity and futures markets after the president’s speech. We will get an early indication as to how the markets interpret President Obama’s make or break speech during after hours trading and in the futures markets. As always, we will rely on our Trade Triangle technology.
So far today the $90 a barrel has proven to be resistance on the upside in the October Crude Oil contract. What is also disturbing is the fact that the Williams % R is setting up for a negative divergence to the downside, but it’s to early to tell. We will need to have more data to confirm this move. A negative divergence on the Williams % R indicator is as follows: the market makes a new rally high, yet the Williams % R does not follow. This technical situation is also exacerbated by the fact that crude oil is at the top of its Donchian trading channel.
Our Trade Triangles are for the moment mixed, indicating a lack of any serious long term trend. With our monthly Trade Triangle still in a negative mode, we expect that crude oil will continue to move in a sideways manner much like it did for most of August. The longer term monthly Trade Triangle must be given more weight than either the daily or weekly Trade Triangles.
Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = + 70
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