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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
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Wednesday, October 26, 2016

Equity Bear Trap Looming?

Background information on the SPX:VIX ratio can be found here. Equity volatility will elevate as long as this ratio remains below the 150 level (as of 1:45 pm ET today it has fallen below, once again, as shown on the following Monthly chart).

BUT, watch for a potential bear trap, inasmuch as price action and all three technical indicators have morphed into triangular patterns and are nearing their respective apex in readiness for a major breakout, one way or the other, as shown on the Daily chart below.

With the U.S. Presidential election only two weeks away, I doubt whether the aggressively-bullish scenario, that I painted as a possibility in my post of July 1st, is realistic. However, we may see the SPX surge toward that 2280 level, so I'd keep an eye on this ratio to see if price can break and hold back above 150, whether the RSI climbs back and holds above 50, and whether the MACD and PMO re-cross and hold to the upside, as confirmation of such bullish aggression.

Monday, October 10, 2016

VIX Volatility Defies Today's Spike in SPX

As of 12:50 pm EDT today, the SPX:VIX ratio pair is not on board with today's spike in the SPX, as shown on the following Daily ratio chart...instead, watch for weakness ahead on the SPX.

Tuesday, October 04, 2016

The Highs & Lows of the United Kingdom

We've never seen a wider spread between the FTSE 100 Index (it hit all-time highs today) and the British Pound vs U.S. Dollar forex pair (now at new 30-year lows), as shown on the following Monthly charts...presumably the after-effects of the "Brexit" vote.

The question is, is this the new normal and what will that mean for inflation in the UK if it is?

Thursday, September 29, 2016

Deutsche Bank: From Riches to Rags in 9 Years

From an all-time high of 103.14 in May of 2007 to an all-time low of 10.19 (and close at 10.875) today (Thursday), Germany's biggest bank continues its sink into the abyss, as shown on the Monthly chart of Deutsche Bank.

The 3 technical indicators shown on the following Daily chart are no longer supporting a slowdown of its downtrend (as I had reported in my post of February 8th)...rather, they are now suggesting a resumption and acceleration of a stock dump.

This bank stock is now sitting at a tiny fraction of its former value...systemic-risk or value stock? A picture is worth a thousand words...

Even more stunning, is the meteoric drop in value (from its June 2007 high of 228.96 to today's close of 5.80) for Germany's second-largest bank, Commerzbank, as shown on the Monthly chart below.

All three technical indicators on its Daily chart below also show evidence of renewed and accelerating selling pressure...reflecting great weakness in Germany's banking sector, despite all of the ECB's various monetary stimulus attempts made, to date, to prop up Europe's financial woes from the onslaught of the 2007/08 financial crisis/recession.

Tuesday, September 27, 2016

World Market Index Hovers at Make-or-Break Level

All three indicators on this 5-Year Daily chart of the World Market Index are slightly above their respective zero levels, with price hovering above the 50 moving average. They'll all need to hold at or above those levels, otherwise a sharp failure would likely spell big problems for U.S. equities.

Friday, September 09, 2016

Volatility Back Into "Major Conflict Zone"

After today's (Friday's) 53.5 point drop on the SPX, volatility has now fallen back into the "Major Conflict Zone," as depicted on the following 20-Year Monthly ratio chart of SPX:VIX.

As I mentioned here and here, a drop and hold below the 150 Bull/Bear line-in-the-sand level would see a retest of the June 27th lows. You can see from the 60-Day 60-Minute ratio chart below, price closed today at 121.5. There are two remaining gaps below that level yet to be filled, which, when filled, would realize that retest.

Each candle on the following ratio chart depicts One Year. You can see clearly that today's close sits just above the 116.61 open of the 2007 candle.

Each candle on the following ratio chart depicts One-Quarter of One Year. As of today's closing level, upward Momentum is lower now than it was at the open of the Q1 2007 candle...hinting that the buying and bullishness seen on the SPX this year (which pushed Momentum to an all-time parabolic level on the Monthly ratio chart), is, in fact, weak, unsustainable, and without serious merit.


Volatility has now risen sharply, after a summer of complacency. Look for wild swings in both directions on these ratio charts as long as price remains below 150. And, if it drops below 80.00, after a retest of the June 27th lows, I'd say that equity markets are in serious trouble and in for a substantial drop.

Friday, August 12, 2016

Complacency & Risk-Taking Leap Into The Unknown

Further to my post of August 2nd, and as of today's (Friday's) close, the SPX:VIX ratio,  has now stepped into unknown territory, while Momentum continues its unparalleled parabolic rise, as shown on the following 20-Year Monthly chart below.

The gaps shown on the updated 60 minute ratio chart below remain unfilled...just a reminder of what I said...