Wild ride today with NQ (NDX future)plunging down to weekly S1 after an initial scare at 20 DMA where the COMP found support (2400), enabling the markets to reverse at the close. Gold held its own, after a test of 50 DMA. The bearish outlook for the tech sector that started yesterday is not cleared out as the COMP and NDX still close under their respective 10 DMA's. Nevertheless, bulls averted a major sell-off in the face of 66 oil. It will be important for the markets to get an NDX close above 1780/1783 by tomorrow. The bulls are not out of the woods, we will see how the closing NQ doji resolves (chart). Bears also need to understand that as long as the Yen stays red, bulls will buy the dips. That could all change next week, but for now Japanese investors are redistributing capital ahead of Q1 close.
Contract rotation is finished for gold and the forces dragging down the April contract should now be over. As long as 665 holds, June should be back on the way to 685. We have a major confluence of moving averages, a virtual wall of support between 661 and 666.70. It will take a huge jump in the dollar for gold to fall apart. I don't think that is likely. Inflation is still a threat and will be even more so if rates are lowered.
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on Thursday, March 29, 2007 at 3/29/2007 03:59:00 PM.
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