September Crude oil – Crude oil and gasoline climbed for sixth day, the longest stretch since January, as a better-than- expected earnings at Caterpillar Inc. signaled the recession may be easing. But the good news could not overcome the overhead resistance from the 20-day MA as early gains turned into late session loss. The reaction cycle still suggests one more drop to test the recent low is needed to complete the full cycle. Sell the Crude oil at 64.05 stop, with a protective stop above the new pivot high.
August Gold – On Monday Gold climbed to a five-week high, as a weaker dollar and higher oil prices boosted the metal’s appeal as an alternative investment and a hedge against inflation. Although Gold did not form the bullish reaction swing I was looking for, it did trade below the low of Thursday’s inside day—posting a low on the 20 day MA—before trading above the high of the inside day. This is a bullish pattern and suggests a run to the centerline is probable. Buy Gold at $942.50 or lower, with a protective stop at $930.50.
September Japanese yen – In the last issue, I said the Yen had made a new high on July 13th when it reached 1.0909, taking out the high of 1.0904 on July 8. This was a swing pattern failure when the Yen failed to continue to trade higher after the initial breakout, but instead, it reversed and began to trade lower over the next five days. This is a red flag waving, suggesting the Yen has topped and could be forming a bearish TR pattern with a rebound to 1.0767. The Yen came very close of Tuesday with a high of 1.0727.I’ll wait one more day to see if it can reach the major sell window at 1.0767 before triggering a sell signal.
