Yesterday’s closing price reversal top in September Silver was confirmed with a breakdown under 13.58. The first objective was met today at 13.26. Additional selling pressure may break this market to 13.07.
Overnight the Shanghai Composite Index dropped 5%. This put pressure on U.S. equity markets from the opening. After finding resistance at 50% of the week’s range at 974.00, the September E-mini S&P 500 is now poised to retest the low of the week at 964.00.
Weakness in the equity markets is sending money to the fixed income complex, thereby helping boost the September Treasury Bond. If the bonds can continue this current upside pace then look for a possible rally to 118’05 over the short-run. Auction results should be posted at about noon central time. Yesterday the results broke the bonds so long traders have to watch the price action during this time period. At 1:00 pm central time the Fed will release its Beige Book. Most traders expect the report to show that the economy is stabilizing. This report has been known to move the markets.
A rise in inventories triggered selling pressure in the September Crude Oil. Based on the range of 59.30 to 68.90, the first objective at 64.15 was tested early. Selling momentum blew through this number allowing for a test of the lower end of the retracement range at 63.00.
The September Euro is under pressure at the mid-session. Yesterday’s closing price reversal top was confirmed and the main trend turned down when the market crossed the last swing bottom at 1.4119. The first objective to the downside was met at 1.4069. The next target is 1.4013. Since we are in a retracement zone, there may be a short-covering rally.
