Like a self-indulgent deer staring into headlights...

Wednesday's economic calendar:
Veterans Day - stock/futures markets open, bond markets closed.

Dumb money has been pouring into international corps that may benefit from lower USD but we knew what came out of IBM , don't we. Why? 'cause cancer is not contained in US anymore. Europe, is now in as bad shape as US, to say the least.

Somethings never change in Wall Street, Suckers are now buying the top as usual, forgetting the fact when the Pandora's box opens, USD may take off like a VIX index during a selling climax, forcing the sheeplie to the exit all together at the same time... sounds like a 4-sigma cause.

S&P	Trend	Support	Resistance
Weekly	Up	876	1200
Daily	Up	1012	1110
Vix	Bullish	20	31

R3	1115
R2	1103
R1	1098
Pivot	1093
S1	1086
S2	1079
S3	1067

NOTE: Nov 11: price on daily is now overbought

Oil	Trend	Support	Resistance
Weekly	Up	65.00	90.00
Daily	down	65.00	90.00

Note:

Euro	Trend	Support	Resistance
Weekly	UP	1.4304	1.5066
Daily	UP	1.4440	1.5006

R3	1.5074
R2	1.4946
R1	1.4835
Pivot	1.4707
S1	1.4596
S2	1.4468
S3	1.4357

S&P500

- Long term trend remains up, and intermediate trend is Up

- Yesterday was a non eventful day with most major indexes closing near unchanged. except for the small cap which closed down 1%. These indexes are now overbought on their daily charts, and yesterday's indecisive price action could be the sign for an intermediate top. But as I look at the dollar chart, it is not showing any signs it wants to bounce higher. Indicating it wants to slide lower. Since dollar moves inversely to the general market, this will allow the market to advance further.
- You can take a look at the S&P "fan" chart below(this is a bearish pattern), we are once again forming another top. Markets need to reverse this week in order for this topping pattern to play out. Or else the S&P is likely to probe up to the 1120-1150 level. Traders should hold on to their remaining long positions to see how far this uptrend can go, but do not initiate any new long positions. One could also take a small short position to hedge against their longs at this level.
- Another sign of weakness is the financial chart I posted below. It has clearly broken down and lagging in this market advance.

Crude Oil

- Long term trend remain up , intermediate trend turned down.

- Oil continues to fight the $80 level. The Fed wants inflation, which will cause oil price to go up. The Fed also wants economic recovery, which needs oil price to remain relatively low. Ultimately, oil price among with other commodity prices will go up. But as traders, this is not a good environment to be trading oil. Manage your risk.

Gold

- Long trend remains up while intermediate trend is Up

- Gold consolidated yesterday and price was able to hold around 1100. At this point, it all depends on what the dollar can do, but in the mean time, go with the trend, which is up.

US Dollar

- Long term trend remains down, intermediate trend is down
- Dollar is oversold on the daily chart and price is trading side ways along the $75 level. Without any noticeable positive divergences, the most likely scenario for price action is down. Which implies the stock market will continue to move higher. We'll see how the market plays itself out today.

Conclusion
As the G20 decided to continue to inflate away, are we seeing a repeat of what happened in 1983? Is the gold market telling us of an eminent dollar collapse? We will have to wait and find out. But for now, trade the trend and manage your risk.







--
Michael Chang
Technical Analyst
Washington Asset Advisors