Gold, Crude, Euro, Aussie Plummet
By Colin Twiggs
August 12, 2008 4:00 a.m. ET (6:00 p.m. AET)
Spot gold broke through primary support at $850, signaling the start of a primary down-trend. The next level of support is $770.
The target for the breakout is $700. That is $850 - ($1000 - $850).
West Texas Intermediate Crude is also in a strong down-trend: headed for medium-term support at $110/barrel.
The longer term target is $100, calculated as $122 - ($145 - $122).
The euro has plunged since breaking primary support at $1.53, penetrating the next level of support at $1.50. And retracement to test the new resistance level was quickly overrun.
The calculated target is $1.46, that is $1.53 - ($1.60 - $1.53), but $1.43 is a more likely support level.
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The dollar penetrated resistance at 108.50/109.00 against the yen, signaling the start of a primary up-trend. Expect a retracement to test the new support level.
The target is 120 yen — at the upper border of the long-term descending triangle.
Unwinding carry trades appear to have destabilized the Australian dollar which is weakening against both the yen and the greenback. Since breaking primary support at $0.93 the Aussie fell through the next level of support at $0.90 and has already reached the target of $0.88, calculated as $0.93 - ($0.98 - $0.93). Expect further support at $0.85. Failure would warn of a test of $0.77.
The Aussie also broke support at 100 against the yen, signaling a test of support at 96. Failure would warn of a test of primary support at 88.
Sometimes the best trades
are not the winning ones that put money in your pocket;
sometimes they are the ones that get you out of the market at the right
~ Phil Flynn
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