Crude oil [May contract] closed higher on Monday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term.
This is somewhat of a things that make you go hmmmmmm exercise, but lets examine this 1356 number for a second here. The SP 500 hit 1356 today and put on the brakes and reversed down to 1341 in a possible terminal top move.
1356 actually has fibonacci relationships. If we take the last major rally which was from the Summer 2010 lows:
A few weeks ago I wrote about how gold was starting to top and that everyone should expect a very sharp drop to the low $1600 area. How I came to this conclusion was though the use of inter-market analysis combining price patterns, gold futures volume, the dollar index and market sentiment.
I got a bit of hate e-mail over the last few weeks from the Gold Bugs who thought I didn’t know what I was talking about when I forecasted a multi-month consolidation and correction in Gold was imminent. I’ve written ad nauseum about crowd behavioral patterns as they related to both stock markets and precious metals.
A few weeks ago I penned a public article and private forecast for my subscribers calling for a major correction in Gold being due. 72 hours after my forecast, Gold had dropped a stunning $208 per ounce in 3 days catching most by surprise. Why did I forecast a top in Gold then? Why did Gold rally back to new highs recently?
The lows at 1101 were a convergence of Fibonacci weeks, months, sentiment bottoms and VIX extremes along with major insider buying all at the same time.
AUD/USD has declined to the 1.0375 low, dropping to the 50% level on the Fibonacci (from the 1.1078 high). Intraday bias remains on the downside, as long as the 1.0778 minor resistance line is not broken. On the downside, the currency pair broke the 1.0390 major support line and hit the 1.0375 low.
One of the many useful characteristics of options is that the astute trader can design strategies to capture profit from predicted price action forecasts from a wide variety of technical indicators. I think it is helpful to have knowledge of several approaches to technical analysis in order to recognize patterns that other traders may not see.
