Continue To Be Uncertain

The market continues to be uncertain. While the equities market is trying to find support, GLD, the gold ETF is holding its strength to move above the 139/140 level. Looking at the weekly price chart for GLD, it is still trending above its 40 weeks SMA and its long term trend line. Whether it is the geopolitical issue in the Middle East or the natural disaster in Japan, gold is showing strength it is heading back toward 139/140 resistance level. I will be watching GLD to break the 140 resistance soon.

GLD weekly:



GLD daily:




On the flip side, the semiconductor ETF, SMH is facing more downside pressure due to the earthquake in Japan that could potentially cause a shortage of raw silicon wafers for the world chipmakers. Even before the earthquake in Japan, the SMH has already formed a double top and started its retracement. Last week, it has retraced the double top measured move. As the situation in Japan stabilize next week, the SMH could experience an oversold bounce back to the 34 level near the 20 EMA, then it will most likely reverse back to its downtrend.

SMH:



The natural disaster in Japan will undoubtedly have an effect on the supply chain for many technology companies. This will cause some tech companies to reduce their quarterly projection and will put additional pressure on the Nasdaq 100 in the short term. One of the company that could adversely affect by the Japan earthquake is AAPL. If it cannot source just one component for the iphone or for the ipad due to its Japan supplier manufacturing interruption, then its production of the iphone and/or the ipad will come to a halt when the component inventory runs out.

AAPL: