TECH TRADE

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COPPER

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Copper prices might be forming a medium-term base at these levels. Confirmation of the base formation will be a decisive breakout above 3.4 levels. Chart pattern suggests an inverted head and shoulder might be close to completion once price clears 3.4 levels. MACD is trying to reverse from 0 levels (bullish) and price is challenging the 200 day moving average. On the weekly scale 3.0 levels acted as strong support after price tested it for three times over the past two years. Until we see a decisive breakout above 3.4 levels technical outlook should remain neutral. Above 3.4 levels price will target 3.7 levels and the technical outlook will turn to positive.

Weekly price chart of COPPER

COPPER weekly

Daily price chart of COPPER

COPPER daily

TECH TRADE

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U.S. JOBLESS CLAIMS

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US WEEKLY JOBLESS CLAIMS

After four years of strength in employment figures, weekly jobless claims found support at multi-year low around 300K. Weekly jobless claims reversed from 280K-300K area in 1989, 2000 and 2006. Similar reversal might be in place as we enter the last quarter of 2013. Jobless claims already experienced a sharp rebound over the past few weeks and as long as it stays above 280K-300K area we could see weak employment figures in the coming months. Today’s number came in at 358K and this is clearly above the strong support area. Earlier analysis on the jobless claims can be found here (August 9, 2013 , June 6, 2013)

COCOA

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COCOA

COCOA daily

Cocoa moved higher after its breakout from the base formation – a cup with handle. This chart pattern is usually regarded as bullish and a breakout above the horizontal resistance suggest higher prices. Price target is calculated by adding the width of the formation to the breakout level. In the beginning of August (August 8, 2013), I’ve analyzed Cocoa prices and drew attention to the breakout and calculated a price target of 2,800. Since then prices have climbed higher and reached the formation price target.

Cocoa can slow down at these levels but a breakout above this flat resistance could send prices higher resulting in a similar uptrend that took place between 2007 and 2008.

 

DOW JONES INDUSTRIAL & US 5 YEAR T-NOTE

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Dow Jones Industrial Average pulls back to its long-term 200 day moving average. This is also the 5 year-long trend line support. At this point I see the market oversold. Strong support area is between 14,300 and 14,500. It is important to note that Dow Jones Industrial Average has been trading in a wide range between 14,500 and 15,500 over the past 4 months. It is now close to the lower side of that range.

U.S. 5 year T-Note completed a pullback to the broken trend support. Both trend line and the 200 day moving average are forming strong resistance between 122 and 123 levels. Unless we see prices breaching 123 levels, trend direction will be downwards.

TECH TRADE

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Japan, Norway, US, Turkey, Italy, France

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Here are some of the exciting charts that I shared on twitter @TechCharts. I’m attaching the twitter feeds for those who are following the blog but not twitter. More will be posted soon under the new category of Tech Trade. Tech Trade will include low volatility chart set-ups and widely followed chart patterns.

USD/ZAR & USD/IDR

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ZAR

IDR

Emerging market currencies are going through challenging times as they lose ground against the U.S. dollar. After two decades of massive depreciation against the U.S. dollar (1980-2000), most of the EM currencies stabilized and started moving sideways in a wide range. Latest sell-off pushed the cross rates to test their upper boundaries. South African Rand reached the upper boundary of its contracting range (possibly a symmetrical triangle) and Indonesian Rupiah the upper boundary of its flat consolidation range. The question now is whether the decade long consolidations will resume or will be followed by strong breakouts. These long-term charts should be on our watch-list in the following months.

COPPER

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Copper prices might be forming a medium-term base above 3 levels. 3 level acted as strong support and it was tested for 3 times over the past two years. Inverted head and shoulder chart pattern has a trend resistance (neckline) at 3.4 levels. Breakout above this level will clear the neckline and the 200 day moving average. Such technical action will be positive for Copper prices and could be the beginning of a larger-scale uptrend.

COPPER weekly

COPPER daily