Where Are We?

After the market made more than 20% gain in the last four weeks, a pullback is not unusual. But with constant reminder from the talking heads that this rally is a bear market rally, fears get triggered whenever a pullback comes along. But if some key levels are being monitored, then one doesn't have to fear the pullback. Instead, one can be prepare to take advantage of the pullback when it occurs. So where are we?

The market is still in the rally mode until it has violated key support levels. Click on the following charts for a larger image to view those key support levels.







As I have mentioned before, I will tighten up my stops on my longs here and won't be aggressive on setting up new longs until after the key supports have been tested and held. I will wait until supports are broken and confirmed with negative momentum before I go short.

Where is gold now?

Since my last post on gold, it has made a turn to the downside. The chart for gold's continuous contract displays lower high and lower low, and this is a signature of a down trend. It is trying to find support from the 200 SMA. For the ETF, GLD, it is bouncing off the 200 SMA with a long shadow inverted hammer candle. If you are considering on trading gold on the short side via ETF, then you might take a look at the GLL. It is an ultra short on gold. Be careful on these leveraged ETF, they are for trading purposes only and not for long term holding.








What about oil?

Although oil has retreated back below $50 a barrel after it has moved above $55 for a brief moment, the trend still pointing toward the $50 and above level. It could be establishing a trading range between 45-55 for the near term. The ETF, USO is trending within a rising price channel with a near term top range of 33-34. I would go long on the USO whenever it bounces off the price channel's lower trendline for a swing trade.