Crude Oil Tests Key Support Level
By Colin Twiggs
November 21, 2006 5:30 p.m. AEDT (1:30 a.m. ET)
November 21, 2006 5:30 p.m. AEDT (1:30 a.m. ET)
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Gold
Spot gold is consolidating between $630 and $615 after failure
of the mid-month breakout. Expect the current short-term rally
to test the upper border of the consolidation.
Source: Netdania
Medium Term: An upward breakout above $630 remains
likely, although this will encounter further resistance between
$640 and $675. Failure of support at $615, on the other hand,
would test initial support at $600
Long Term: Primary support at $540/$550 may come under pressure if oil prices continue to weaken.
Long Term: Primary support at $540/$550 may come under pressure if oil prices continue to weaken.
Source: Netdania
Crude Oil
December Light Crude closed higher at $55.81 after testing
$55.00 at Monday's opening.
Medium Term: Expect strong support at $55 (the low from November 2005), causing an intermediate rally or consolidation.
Medium Term: Expect strong support at $55 (the low from November 2005), causing an intermediate rally or consolidation.
Source: Tradingcharts.com
Long Term: Failure of the $55 support level would warn
of a long-term down-trend, while consolidation above $55 would
establish a base for continuation of the present
up-trend.
Currencies
The euro retraced after reaching $1.290 dollars, but the
intermediate trend remains intact (confirmed if there is a rise
above $1.29). A fall below short-term support at $1.275,
although less likely, would signal a reversal.
Medium Term: Consolidation between $1.25 and $1.30 continues. The direction of any future breakout, however, remains uncertain.
Long Term: Upward breakout from the consolidation would test the previous high at $1.37, while a downward break would test primary support at $1.165, threatening a large head and shoulders reversal.
Medium Term: Consolidation between $1.25 and $1.30 continues. The direction of any future breakout, however, remains uncertain.
Long Term: Upward breakout from the consolidation would test the previous high at $1.37, while a downward break would test primary support at $1.165, threatening a large head and shoulders reversal.
Source: Netdania
Treasury yields
The 10-year yield continues in bear territory below its 100-day
moving
average, testing support at 4.60%.
Medium Term: Failure of support at 4.60% and a fall below the long-term trendline would signal long-term weakness. A rise above the recent high of 4.80%, on the other hand, would complete a small double bottom with a target of 5.00%.
The yield differential (10-year T-notes minus 13-week T-bills) continues its down-trend below zero, increasing the risk of an economic slow-down.
Medium Term: Failure of support at 4.60% and a fall below the long-term trendline would signal long-term weakness. A rise above the recent high of 4.80%, on the other hand, would complete a small double bottom with a target of 5.00%.
The yield differential (10-year T-notes minus 13-week T-bills) continues its down-trend below zero, increasing the risk of an economic slow-down.
Long Term: Probability of recession in the next
four quarters increased to 42 per cent according to the
Wright
Model. A rise above 50 per cent would be cause for
concern.
No man is entitled to the blessings of freedom
unless he be vigilant in its preservation.
~ General Douglas MacArthur
~ General Douglas MacArthur
Technical Analysis and PredictionsI believe that Technical Analysis should not be used to make predictions because we never know the outcome of a particular pattern or series of events with 100 per cent certainty. The best that we can hope to achieve is a probability of around 80 per cent for any particular outcome: something unexpected will occur at least one in five times.My approach is to assign probabilities to each possible outcome. Assigning actual percentages would imply a degree of precision which, most of the time, is unachievable. Terms used are more general: "this is a strong signal"; "this is likely"; "expect this to follow"; "this is less likely to occur"; "this is unlikely"; and so on. Bear in mind that there are times, especially when the market is in equilibrium, when we may face several scenarios with fairly even probabilities. Analysis is also separated into three time frames: short, medium and long-term. While one time frame may be clear, another could be uncertain. Obviously, we have the greatest chance of success when all three time frames are clear. The market is a dynamic system. I often compare trading to a military operation, not because of its' oppositional nature, but because of the complexity, the continual uncertainty created by conflicting intelligence and the element of chance that can disrupt even the best made plans. Prepare thoroughly, but allow for the unexpected. The formula is simple: trade when probabilities are in your favor; apply proper risk (money) management; and you will succeed. For further background, please read About The Trading Diary. |