Critical juncture for many markets

I mentioned last week that caution should be applied to the stock market rally as the 20% plus moves seemed to be running out of steam. The S&P500 has retraced back below the important 805 level with a negatively biased RSI and imminent MACD downside cross over on the daily charts. The technical indicators provide a clear signal that markets should move lower very quickly but with the G20 meeting in progress the "invisible hand" may have other ideas.

The FTSE 100 last night filled an overhead gap and reversed to the downside a very bearish signal. It has also completed a Fibonacci 61.8% retracement of the down move that began in early February. Watch the 3750 level if this breaks we will likely to see a re test of the recent lows.

FTSE100 Daily (click on chart for larger view)


The next few days will be critical for many markets.

The chart patterns indicate downside bias for the FTSE100,S&P500 and the Australian dollar. Alternatively upside bias for gold and silver.

A reminder that "announcement volatility" is high for most markets right now, in particular gold, and as such can have significant short term influence on markets.
For example there was much chatter leading into G20 about the IMF selling gold reserves to fund developing nations but in contrast Russia and China are calling for a new world reserve currency basket which would include gold. I guess my warning here is be very careful about short term trading, instead focus on the longer term fundamentals and use the volatility to build strategic investments.