The most important number for COMEX gold is $1,540 an ounce. This was the support level tested in October 2011 and in May 2012. It acted as a resistance level in June 2011.

This is the lower level of a long-term sideways trading band that has been in place since October 2011. This trading band developed after the peak high of gold near $1,924 in September 2010.

The upper edge of the trading band is the strong resistance level near $1,800. This resistance region was tested in November 2011 and in March 2012 and again in October 2012.

The reality is that gold has been trapped in the sideways trading band since November 2011. The trading band includes strong rallies and strong retreats. This offers good short term trading opportunities.

In May 2012 the gold price moved below the long term uptrend line. The long term uptrend started in February 2011. Once the price moved below the long term uptrend line it rebounded from support near $1,540. The value of the long term uptrend line acted as a resistance level in October 2012. The value of the trend line was near to the upper edge of the trading band near $1,800.

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The width of the trading band is $260. This value is used to calculate the potential downside and upside targets if gold price develops a breakout. A move below the support level near $1,540 has a downside target near $1,280. This calculated target is above the historical support level near $1,260. This suggests that any fall below $1,540 has the potential to fall to support near $1,260.

The Dow Jones Industrial Average has developed a long term up-sloping trading channel. A trading band is created when there are clearly defined horizontal support and resistance levels. Price movements rebound between these levels. Traders buy at the support level and sell at the resistance level. Many trading-band trades are part of a prolonged sideways price movement.

Trading channels are created when the stocks trend upwards and two parallel trend lines can be plotted. These also act as support and resistance levels but the value of these levels changes over time. Traders buy on support and sell on resistance. These trades are more profitable as the resistance level moves upwards over time.

The upper edge of the trading channel is well defined on the weekly chart of the Dow. It starts with the high in July 2011 near 12,650. The second anchor point is the high in March 2012 near 13,250. The current index activity is testing the position of the upper trend line near 14,100.

(Read More: 'Powerful Force' Underpins Stocks)

The lower edge of the trading channel is not so well defined. The first anchor point is in June 2012 near 12,100. The second anchor point is in November 2012 near 12,490. This chart pattern needs a third anchor point to confirm the placement of the lower trend line and to fully confirm the channel trading pattern.

Speaking to CNBC on December 21 as the dollar/yen moved above 84 we set the first resistance target near 87 and an upside resistance target near 95. Over the past three weeks the dollar/yen has hovered near 94 to 94.5 as it chews its way through options at this level.

There are several key technical questions. They include: How strong is resistance near 95? If there is a breakout above 95, then where is the next upside target? If the current uptrend collapses, then where is support?

Before answering these questions it's useful to remember that the dollar/yen breakout above 79 in October 2012 was part of a long term fan reversal pattern. We have discussed this pattern in previous notes in 2012 prior to the breakout. In this sense the breakout is not unexpected, but the speed of the breakout was not anticipated. This context is important because it suggests the current fast breakout is part of a much larger bullish pattern.

(Read More: Why G-20 Isn't a Sign That Yen Will Fall Further)

Resistance near 95 is well established. It acted as a support level in March and August 2009. It acted as a resistance level in April 2010. This has been a major feature of the market post the global financial crisis. This suggests it will remain a strong resistance level in 2013. This may mean the dollar/yen spends several weeks or longer consolidating near this resistance prior to developing a breakout or change in trend direction.

A breakout above 95 has two upside targets. The first target is near 102. This was a major support level in December 1999 and again in November 2004. However, it offered no support in April 2008. This suggests that it will offer limited resistance for a breakout above 95.

(Read More: Currency War Defused? Doesn't Seem Like It)

The most powerful support/resistance level is near 102. This acted as support in June 1997, January 1999 and again in September 2005. It acted as a resistance level in January 2004 and June 2008. It was the peak high used for the start of the long term fan trend reversal pattern in August 2008.

Technically it is difficult to get excited about oil. OK there has been a 25 percent move from support near $78 a barrel to resistance near $98 in NYMEX crude. That's good for traders and a challenge for hedgers, but in today's markets, this rise is nothing to write home about.

The higher probability rally pattern from $88 to $98 only delivers a gain of 11 percent. Put that next to NASDAQ and S&P performances and it looks a little ordinary.

It's the weekly oil chart that puts short term hysteria and hype into context. The last time oil moved above $100 was in February 2012 and that was a limited run to $110 that ended in May 2012. It was the last knee jerk reaction of a market that had failed to recognise the fundamental shift in oil pricing created by the shale oil revolution in the United States.

(Read More: Industrial Production Drops 0.1% on Weak Manufacturing)

Major disruptions, civil, climatic and military do have a short term impact on price, but these impacts remain relatively small and they are constrained by the well defined support and resistance levels. With oil flowing from shale oil deposits, the U.S. is now a net exporter of oil.

(Read More: Oil Rally Could Fade If Fed Hints at Policy Pause)

The message is clear. The speculative money has moved out of oil in search of better risk and reward metrics.

The chart activity of NYMEX oil over the past two years shows a stable market with good support and limited upside despite revolutions in the Middle East, kidnappings and hurricanes. This is a market that has moved sideways for almost two years and chart analysis must recognise this behavior. This is a sludge market with slow moves.

The recent rebound in the U.S. dollar has markets questioning just how strong and reliable is the rebound in the dollar index?

The strength or weakness of the US dollar is currently influenced by two features. The first feature is the continuation of quantitative easing in the United Sates, which should lead to weakness in the currency. The second feature is the looming showdown on budgets and automatic spending cuts, known as the sequester, which kicks in March 1. This uncertainty will also help weaken the US dollar.

Both features suggest that the current rally in the US dollar index is temporary.

The euro/dollar chart is a story of trend and well established support and resistance levels. The trending behavior carries the euro/dollar between the support and resistance levels. The trends are interrupted by consolidation behavior at the support and resistance levels. This combination of behavior is best seen on the weekly chart.

Starting May 2011, the euro/dollar moved in a downward sloping trading channel. This is defined by the trend lines A and B. In September 2012, the euro/dollar staged the first breakout above the upper edge of the channel, trend line A. This line was used as a support level with a rebound in November 2012 from $1.27. This rebound point provided the anchor point for the new uptrend trend line C.

Up trend line C has accurately defined the rising euro/dollar trend with successful tests and rebounds in January 2013. There is a high probability that any retreat in the euro/dollar will find support at or near this uptrend line.

(Read More: This Euro Rally Could Keep Going for a While)

The trend movement has been constrained by the strong support and resistance area near $1.29. The market consolidated around this level before moving to resistance near $1.34. The breakout above $1.34 has been strong despite the historical strength of this level as a support and resistance feature. This suggests a high probability of a retreat and retest consolidation of this level. This is a strong level, so a test and retest is not a signal to go short.

The NASDAQ index is not a replica of the S&P 500 Index. It's correct that the NASDAQ is moving into new six-year highs but it has been doing this for many months. The breakout above 2,900 in February 2012 was the first move to make new six-year highs. The general NASDAQ uptrend continued for most of 2012.

There is a very important difference between the NASDAQ uptrend and the S&P uptrend. The S&P is moving towards 1,550. This is a high point reached in 2000 and again in 2007. It has been a powerful resistance level and it could be a powerful resistance level in 2013.

When the NASDAQ moved above 2,900 in 2012 it broke above the strongest resistance level on the NASDAQ index. To understand why, we need to look at some history. In October 1999 the NASDAQ paused briefly near the 2,900 level and then it moved rapidly upwards. In four months it moved from 2,990 to the peak high of 5,132.

This was a massive 71 percent rise later called the internet or tech bubble. From the high of 5,132 the NASDAQ collapsed to below 2,990 in eight months. It took another two years to reach the turning point low of 1,329 in October 2002 at the bottom of the downtrend.

The rally in the Shanghai Composite Index paused near 2,290 before falling down and retesting the 2,250 support level and then developed a good rebound rally towards resistance near 2,340. The retreat in the Shanghai index was a consolidation within the environment of a rising trend. It was not a trend correction and it was not a change of trend direction.

The pattern of behavior in the Shanghai index rally suggests a rapid breakout above 2,340 followed by a retreat and a test of 2,340 as a new support level. This is the step pattern behavior.

The current step pattern in the Shanghai index is moving very rapidly. This fast up move is very useful for shorter term trading but traders must use a good stop loss to protect profits. The value of the uptrend line is currently near 2,290. The value of the lower edge of the short term group of averages in the Guppy Multiple Moving Average Indicator is a little lower near 2,260. The lower edge of the short term GMMA will also act as a support level.

The Relative Strength Indicator (RSI) can be used as a measure of overbought or oversold market conditions. The overbought area is when the RSI is above 70. The current RSI reading is near 60. This means the market is moving out of an overbought condition and into a more neutral market condition near 50. This shows the market is not overbought and also not oversold. The RSI indicator values can return to the middle range near 50 and this will show consolidation in the uptrend.

Starting October 2012, the S&P 500 Index has developed a strong and stable uptrend. The uptrend is well defined using the Guppy Multiple Moving Average (GMMA) indicator. This indicator has two groups of averages.

The long term group captures the thinking of investors. Wide separation shows strong investor support for the trend. The short term group shows the thinking of traders. In the S&P index they are not quite as confident as investors.

The S&P shows rally and retreat behavior with the lower edge of the long term GMMA tested in June 2012 and again in November. For each test investors have come into the market as buyers because they believe the S&P can go higher. This is a bullish result and confirms the strength of the uptrend.

(Read More: US Markets Overview)

The trend behavior does not include any chart patterns which help to set upside targets. However, the long term pattern of support and resistance shows the S&P index moves in wide trading bands.

Each of these bands is around 140 index points wide. The lowest of the support/resistance level is near 1130. The next support/resistance level is near 1270. The current support/resistance level is near 1410. The current rally is a rebound rally from this support/resistance level at 1410. The width of the trading bands provides the next upside target for this uptrend. It is near 1550.

The strength or weakness of the U.S. dollar is influenced by four features. The first feature is the latest round of quantitative easing in the United Sates. The second feature is the inadequate solution to the "fiscal cliff" issue made at the end of December. A solution was achieved but many people believe the solution is only temporary and that it will lead to a U.S. recession. The third feature is the debate about lifting the U.S. debt ceiling. This requires a decision before the end of February. The fourth feature is the potential for more ratings agencies to downgrade the U.S. to double A rating.

These four features contribute to weakness in the U.S. Dollar Index. The index is a basket of currencies comprising the euro, the Japanese yen, the British pound, the Canadian dollar, the Swiss franc and the Swedish krona. The dollar index is used as a measure of the strength or weakness of the U.S. dollar.

(Read More: Picture This: The dollar at 100 Yen)

There are three significant features on the weekly dollar index chart. The first feature is the uptrend line that started in September 2011. One year later, in September 2012, the dollar index fell below this uptrend line. The weekly close below this uptrend line was the first signal of a significant change in the trend direction. This showed weakness in the uptrend, but it did not help traders to set long term downside targets.