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but then secured a firmer tone during the day.
As expected, the ECB left interest rates on hold at 4.00% following the latest council meeting and the main focus was on the statement following the announcement. ECB Chairman Trichet maintained a generally tough stance on inflation in his testimony. Trichet also pointed to downside growth risks and, despite the inflation rhetoric, the overall impression was that the bank was in a holding pattern to await further developments.
Prices closed near the session high yesterday and hit another fresh contract and all-time high of $124.40. This week's price action is an early clue of a "blow-off top" developing in crude oil. Bulls still have momentum and power and would-be top pickers do not want to stand in front of a steaming locomotive. The market is still short- term technically oversold and due for at least a downside correction soon.
MACD crossed below its Signal Line, based on the end-of-day SPY. RSI (14) fell to 54, its lowest level in 3 weeks, based on the end-of-day SPY. Just a few days ago, the SPY had been overbought with RSI (14) above 66, at its highest level since the top last October 2007. Commodity price indexes broke out to new all-time highs. Crude Oil jumped up to a another new high, which is not good for the economy. Energy and Materials Stock Sectors were strong.
Immediately below are two charts of the stock price of Coca Cola (KO) and copper futures. The top chart begins in early 1988 and runs through into late 1992 while the lower chart covers the time frame from late 2005 up to the close of trading on Wednesday. The argument begins with the start of a rising trend for Coke at the end of the second quarter back in 1988.
This is the Dax Weekly Chart. Tuesdays Hanging man on the daily followed by Wednesdays upside rejection had put us on guard for a slide back to take a look at the recently breached 38.2 Fibonacci Retracement at 6968.
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A Futures Guide to Technical Analysis - Part 1: Tracking Price Presenter: Darrell Jobman, Editor-in-Chief, TradingEducation.com, LLC
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May
11,
2008- Content Updated Daily 
