The legs are buckling for oil and gold bulls. If 620 breaks, next support for gold is 616 followed by 604/605. Oil has immediate risk to 69.50, but we have to see what Ernesto does when he hits warm water again. The longer he stays on land (Cuba), the weaker he will become. Currently, CL/QM October is sitting right above 61.8% projection July, must hold at 70.30.
As for equities, nice pop, but NQ found some pretty strong resistance right below 1580.75, weekly R1. Its gap from last week is not closed yet, and since we are currently trading in that gap (1570.75/1585), watch the fibs I put up on the chart. Should bulls really get carried away, we could see NQ 1620 by week's end. But first things first, they need to move up above 1585 and soon. ES did in fact close the same gap but has resistance at last week's high of 1307.75. Nevertheless, quite surprising strength for ES given the weakness in energy stocks.
We have some market moving retail sales data pre-open and post-open the always eagerly awaited consumer confidence number at 10:00 AM. My feeling is that the price of oil will continue to dictate trade as it is the forward looking indicator for consumer health at this point, so watch out for the swings.
This entry was posted
on Monday, August 28, 2006 at 5:09 PM.
