A Friday Close Against 1363.2 on the S&P 500 Keys Direction
Value levels, pivots and risky levels combined with the analysis of monthly and weekly chart patterns are used to evaluate the risk/reward for the third quarter and the remainder of 2012.
My annual levels did not change as they were based upon the 2011 year end closes and remain the same until the end of 2012. The most important annual pivots are $1575.8 on Comex gold and 1363.2 on the S&P 500. These levels are likely to remain magnets for the third quarter and into year end.
Analysis of Comex Gold
The monthly chart for gold is negative and stays negative with a close in July below the five-month modified moving average at $1631.4. The base of the popped bubble is the December 2011 low at $1523.9. The all-time high at $1923.7 was set in September 2011.
The weekly chart is neutral and shifts to positive on a close today above its five-week modified moving average at $1607.7. Weekly closes above my annual pivot and new monthly pivot at $1575.8 and $1578.3 target new semiannual and quarterly risky levels at $1643.3, $1702.5 and 1805.8, but not to a new high. Weekly closes below $1575.8 indicates risk to my semiannual value level at $1388.4.
Analysis of Nymex Crude Oil
The monthly chart for crude oil is negative and stays negative on a close in July below the five-month modified moving average at $94.89. The downside potential is a trend towards its 120-month simple moving average at $67.91.
The oil bubble popped in July 2008 after an all time high at $147.27. The base of this bubble is $33.20 per barrel set in January 2009. The weekly chart shows oversold momentum (12x3x3 weekly slow stochastic) reading. A weekly close above its five-week modified moving average at $88.10 shifts the weekly chart profile to positive.
Otherwise, the 200-week simple moving average at $80.44 will continue to be a magnet as it has been for the past three years. My new semiannual value level is $76.71 with new monthly, annual and quarterly risky levels at $100.47, $103.58 and $107.63, so a new year to date high is highly unlikely. On a break below $76.71 oil could trade down to the January 2009 low $33.20 per barrel.
Analysis of Major Equity Averages