Last week at markets was very interesting. Crude oil prices retreat. At Friday closing it hit $128.88 per barrel.

Crude Oil Futures

Four following sessions gave black candlesticks and price broke resistance of some short-term SMAs. SMA15 started to move downward.

This factor influenced indexes. Two strong white candlesticks emerged on S&P500.

S&P 500

However, last Friday on S&P500 was weaker than two previous sessions. There is important resistance near 1275 formed by January and March minimums and I wouldn’t be surprise that before breaking it, index has to do small backward movement. Next days will show whether S&P 500 is able to attack this price level and go up or will continue downward movement. Of course it is strongly dependent on crude oil price. Therefore, currently we should always look at both charts.

“The good thing about bear markets is that they price in such bad news that it becomes easy at some point to surprise positively,” said Alec Young, strategist at Standard & Poor’s.

Gold behaves very well. SMA15, SMA30 and SMA50 are pointed up. I think last few sessions are only a correction necessary for further movement in upward direction. I currently keep my gold certificates (an asset on GPW – Warsaw Stock Exchange) and expect 1000$ per ounce. Of course this is not the level when I immediately sell. If the gold price would remain in uptrend, I keep it.

Gold Futures

Crude oil

Last Friday crude oil hit new record. Early morning was $147.27 a barrel and closed the week at $145.08.

Crude Oil Futures

S&P 500

As long as crude oil is rising, I don’t look too much for gains on indexes. Since last time I was analyzing S&P 500, index broke the support near 1270 and last week definitely confirmed further movement down. I will wait more time for some strength’s signals on the index, before putting my money there.

S&P 500

Gold

Gold continues to behave as I expected. On Friday, gold touched the resistance – half of black marubozu from March. It is very likely that now, there would be small downward movement before breaking this resistance. Then I expect to find it at least near $1000 an ounce. Of course I treat gold as a long term investment and further actions depends on market situation.

Gold Futures

In my last post I presented why I have bearish approach to the stock market. This situation encouraged me, to look for other possibilities where to invest money. One of the assets, that look very promising for me, is gold.

In June, gold futures gained more than 4% and nearly 11% in first half of the year. In my opinion it is a very nice result. However it is obvious that we won’t take any actions until we take a look at the chart.

After strong gains in first quarter of year, a correction took place. At 1st May we had a minimum, which is still possible to be tested. However currently SMA15, SMA 30 and SMA 50 start to go up. The maximum from 22nd May is broken and now we are about peak from 17th April (near 950). Today’s session shows that gold probably has to make a small downward movement and then will attack this level again.

Currently I keep a small package of gold certificates (they are available on Warsaw Stock Exchange) which I bought few days ago at 902. Breaking 950 will be a good signal for me to put more money into gold. For sure I will keep watching gold and post about it regularly as long as it looks attractive.

Gold will continue to attract increasing monetary demand and the result will be a much higher price,” said Peter Spina, an analyst at GoldSeek.com. “Sub-$1,000 gold days are drawing to a close [and] by the end of this year, I would find it difficult to explain a sub-$1,000 gold price.

WIG (pol. Warszawski Indeks Giełdowy, which is main index on Warsaw Stock Exchange) and S&P 500 are two indexes that I constantly monitor while trading stocks. As you may not know, currently I trade only on Warsaw Stock Exchange, but watching S&P 500 is very important, because most times WIG behave very similar to S&P 500.

Recently, I closed all my positions on stocks taking some serious losses. I didn’t have enough time to watch daily all stocks I picked and react when it was necessary. When the trend is not clear or even worse when trend is opposite to your position, ‘buy and keep’ strategy is definitely not an option. It wasn’t easy to take such a serious loss, but now I know that I saved my money from further losses.

Let’s take a look at both indexes and see how they look like from technical point of view. I don’t want to go too much into details, only basic and simple overview.

S&P 500 with SMA 100. Starting in second half of 2006 SMA100 is going up indicating uptrend. In October SMA 100 is flat. Index reached maximum and from there SMA started to slowly go down. It was the beginning of downtrend. As you can see, SMA still moves down.

Now we take a closer look in shorter perspective. There is a strong support near 1270 points, which worked well in past three times. Last days this support stops more losses. Now, the movement in upward direction is very likely, however resistance in half of black marubozu from Thursday is important. Breaking this resistance would be a nice signal to continue upward movement.

As you can see, it is very possible that there would be short-term upward movement on S&P 500. However the situation on WIG is a little different.

First, short look at WIG with SMA 100. Looks similar to S&P 500. What is interesting, that WIG reached own maximum in July, before S&P 500.

In shorter perspective situation is worse than on S&P500. WIG broke the level of minimum from January. The support didn’t work; therefore further movement in downward direction is possible.

Now it would be very interesting to watch both indexes and compare their behavior, but until there are strong signals for upward movement, I’m mostly away from the market. Right now I keep almost all my money on saving accounts and I invest in…

…this is the subject for another post.