Further to my post of May 2nd, there is a similarity in the behaviour of price action since last May, as reflected in the following two Daily charts of the Commodities ETF (DBC) and the AUD/USD forex pair.

At the moment, each one is trading below both the 50 sma (red) and 200 sma (pink), both are at their respective lower Bollinger Band, the MACD has just hooked down on Thursday's close, and the Stochastics has crossed over to the downside. The DBC is approaching major support in the vicinity of 27.47, while the AUD/USD is trading immediately below trendline apex support of 1.0274.

A break with conviction and hold below these respective support levels would indicate further weakness in commodities, and possibly drag the equities markets further down…two to watch for further direction.

This 3-year Daily chart of the SPX:DBC ratio (S&P 500 Index and Commodities ETF) shows that the SPX is up against major resistance, and is under the influence of declining RSI, MACD, and Stochastics indicators.

This next Daily chart shows a comparison of the SPX to DBC. They've been pretty closely correlated over the past year. I'm paying attention to the recent dip in DBC to see whether it continues down and whether the SPX follows.

This is what buyers of the TF were rewarded with during intraday action through to the close on Mayday, as shown on the Daily chart below (note that volume was higher on Tuesday's candle and is reflecting a build in volatility):

This e-mini futures index has, basically, been in a large sideways trend since the latter part of January of this year. Price has been consistently rejected at 830.00, but remains above 780.00. It's had difficulty remaining in the upper one-third of this range and closed the day just below the 50% level. Failure to hold this 50% level could send it back down to 780.00 or lower.

Further to my last weekly market update, here is a summary of where money flow ended for Week 4 of April 2012.

The Weekly charts below of YM, ES, NQ & TF show that all four closed higher than last week's high…in fact, this week's candle on the ES, NQ & TF are "outside" bullish candles with closes very near their high…highly bullish setup. The ES closed right at the lower uptrending channel and the NQ closed above its upper channel…we'll see whether the ES can re-enter and stay within the channel to continue a rally…I'd be looking for the ES to hold above this week's high of 1403 in this regard. Otherwise, a failure at this level could send the ES down to the middle Bollinger Band at 1338.

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