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Turning point in equities and the precious metals Weekend Market Wrap-Up Oct 26 2012

584 views · Published 26 October 2012 · 4:38 · Indexed 2 October 2026

Channel: Crush The Street · 2012 · News & Politics

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Welcome to CrushTheStreet.com's Weekly Market wrap-up. Let's get started in the equities sector, where the main theme of Wall Street was "earnings miss." It started with McDonald's, that iconic staple of American consumerism, then it took down Amazon, who's not looking too happy at the moment, and then most recently Apple, whose share price dipped below $600 dollars during Thursday's afterhours trading. Those of you that have been even half-alert to the news over the recent years will realize that you simply can't jerry-rig the economy to prosperity: the real unemployment numbers, the real volume loss, the real decline in output will eventually make its way to the books, manipulated or not. The one big surprise, though, was the huge spike in Facebook shares during Wednesday's session, which shot up 21% from the prior close. Wow! Is this the start of a social-media bull market? I've got a few problems here: Aside from the fact that the CEO looks like Caesar Augustus Germanicus, there are so many gap days in their technical charts that it really resembles a glorified penny stock, which is what it is. Also, take a look at their entire price range. The IPO started off at $45 dollars, then it dropped down to 17.55, a near-perfect 38.2% Fibonacci retracement, and then it shot up to $24 dollars, a little over half the IPO price. Thursday's selloff puts it right at the 50% mark. This was the level that acted as strong resistance during mid to late September, with the social media bulls ultimately failing to clear it. This has all the classic markings of a penny stock after its pump, trying and trying to get past key Fibonacci retracement levels and failing each time. Except that here, we skipped the pump altogether, and started right off at the dump. 
 
Let's talk a little about currencies, which surprise, surprise had good tidings in store for the US dollar index. That God-awful resistance level at the 80 mark was FINALLY taken out, with Thursday's close coming in at 80.12. From the opening bell, it was all fiat, all day, as it surged onwards and upwards, hardly ever taking a peek back. Throughout this week, the greenback was getting a whole lotta mojo as the least worst currency, or, more aptly put, the currency least likely to implode first. That dubious honor was apparently bestowed upon the Euro, which did see some declines that saw it getting knocked off that critical 130 level, much of it coming from the fact that Moody's downgraded 5 key Spanish regions by one or two notches, citing their limited cash reserves and forthcoming bond repayments. Currently, the Euro sits at 129.

Let's move over now to the precious metals, starting with gold, which ended up about a half percent higher from the prior day's close. Although the price action was choppy, especially towards the end of the session, I felt that it was a strong move by the bulls to prevent the yellow metal from dropping further into 1,600 territory. The fact that we had an up day when the dollar achieved near-term highs was a big plus, considering their usual inverse relationship toward each other. Also, the volume is relatively strong, further suggesting that a possible reversal is in play. 
 
Looking at silver, we saw an even more robust move, with today's price action taking the close to 32.13, a move of about 1% up from yesterday. What's interesting here is that the MAC-D line, while still below the zero level, has started to flatten from its downward trajectory, and with positive volume in play, I believe we could see higher prices from here.

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