August 15, 2006 5:15 a.m. ET
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Spot gold made a downward breakout from a large symmetrical triangle, with a target of $450 (630 - (730 - 550)). A close below support at $600 would confirm the signal, but beware of reversal if the dollar weakens.
Contrary to expectations, the US Dollar Index has strengthened since the recent pause in rate hikes, but the intermediate trend remains downward. Reversal below recent support at 84.50 would confirm another test of major support at 83.50 -- and gold would be likely to rally.
The FTSE 100 appears to have respected support at 5800 -- confirmed if there is a close above 5900. Twiggs Money Flow (21-day) is trending upwards, signaling accumulation.
The Nikkei 225 broke through resistance at 15700, signaling the start of an up-trend that should test the earlier high of 17500. Tuesday has remained flat, but as long as the index remains above the new 15700 support level, the trend looks positive.
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The All Ordinaries consolidation has shifted slightly, ranging between 4900 and 5000. As duration of the consolidation lengthens, the direction of the breakout increases in significance. A close above 5000 would be bullish, while a close below 4900 would mean a test of primary support at 4800. Twiggs Money Flow (21-day) appears to be edging higher, but remains uncertain.