Welcome and thank you for visiting!

The charts and comments in my Blog (posted in Eastern Time) represent my technical analysis and observations of a variety of markets...
*World Indices *U.S. Indices *Futures *U.S. Equities & Sectors *ETFs *Commodities *Forex
...an expanded version of the "Observations" section in my private Daily Trading Journal.

*** N.B. to my readers: Although I stopped trading in July 2013, I still take a peek at the markets now and then and post the occasional article here on my Blog.
NEW SERVICE: I'm pleased to announce the launch of my new service as a Certified Professional Life Coach...please check out this page for details and updates.

Peace

Peace

EVENTS

UPCOMING ECONOMIC EVENTS
* Fri. Dec. 19 - Quadruple Options Witching
* Wed. Dec. 24 - NYSE early close @ 1:00 pm ET
* Thurs. Dec. 25 - All U.S. Markets closed
* Thurs. Jan 1 - All U.S. Markets closed

Tuesday, 16 December 2014

Update on Fed Monetary Stimulus "Canaries"

I last wrote about the Fed Monetary Stimulus Program "Canaries" in my post of February 6, 2013. As a reminder, I chose six of of them (ETFs) in order to determine their relative strength/weakness against their respective Stock Market Index, since they may have held clues for further accumulation of riskier assets due to respective Central Bank stimulus programs.

So that we can compare their current relative strength/weakness, I've provided the following 3-Year Daily ratio charts for each "Canary."

XLF:SPX ~ U.S. Financials ETF has, basically, traded lock-step with the SPX since my last post. A recent breakout has brought price back to re-test this breakout level. We'll need to see 0.0120 held if XLF is going to resume an outperformance of the SPX.


EUFN:STOX50 ~ European Financials ETF has, after outperforming the European Index until March of this year, dramatically underperformed and has fallen back to the same levels that were made at the time of my last post. We'll need to see price reclaim and hold above the falling 200 moving average, currently at 0.0081. Price action is under the bearish influences of a moving average Death Cross formation, so we may see an increase in volatility on any re-test of the 200 moving average and either a decisive trend reversal or trend continuation established.


GXC:SSEC ~ Chinese Financials ETF has experienced a roller-coaster ride against the Shanghai Index and has drastically underperformed since the highs in July of this year. Price is approaching a 3-year support level...a drop and hold below 0.025 could send a shockwave through China's banking sector.


XHB:SPX ~ Homebuilders ETF has underperformed the SPX since May of 2013, but has bounced since its lows in October of this year to re-test the 200 moving average. Price is still under the bearish influence of a moving average Death Cross formation...any sustainable reversal of this formation will need to be confirmed by a Golden Cross formation...a break and hold above 0.0170 will be necessary in this regard.


RTH:SPX ~ Retail ETF has outperformed the SPX since August of this year. A drop and hold below near-term support of 0.0340 could see a reversal of this trend, or a re-test of the 50 moving average.


EEM:SPX ~ Emerging Markets ETF has drastically underperformed the SPX, essentially since January of 2013. EEM may be monitored more closely against the USD, as more fully explained in my last post at this link, in addition to monitoring the ratio below. Once again, we see another bearish moving average Death Cross formation on this chart...price would need to reclaim and hold above the major resistance level of 0.023 in order to, potentially, claim a sustainable outperformance of the SPX.


CONCLUSIONS

China's Financial ETF and the Emerging Markets ETF are drastic underperformers, while the Retail ETF has been a major outperformer, as compared with their respective Indices. U.S. Homebuilders, and European Financials have been slack, and U.S. Financials will need to hold above major support to demonstrate sustainable strength. In fact, China's Banking Sector could be sent plunging if its current price level is not held, as I mentioned above.

USD Versus Emerging Markets

The USD has been under accumulation since May of this year when it bounced around 3-year major support from late October 2013, as shown on the following Daily chart.

With daily whip-saw action that began in November, we've seen the RSI come off its highs, but remains above the 50.00 level. The MACD and Stochastics indicators have also been sliding. These are suggesting that we may see either a slowing in buying of USD, or a rotation into other world currencies.


Conversely, we've seen a great deal of weakness in Emerging Markets, as shown on the Daily chart below of EEM. Price has approached 3-year major support around the 37.00 level on increasing volumes, and all three indicators are down around the oversold levels, but have yet to signal that a reversal has begun.


The following ratio chart of the USD versus EEM shows that each time that the current level has been reached over the past 3 years, we've seen a subsequent decline in support for the USD and renewed buying in EEM.  All three indicators are up around the overbought levels, but have yet to signal that a reversal is imminent.


These three charts, and the extent of any upcoming near-term volatility in these two instruments, may be worth monitoring until the price of Oil stabilizes, and other world indices begin to strengthen...or not. It may be that we will see larger volatility ensue in currencies, before they play out to any great extent (or near-term trends become very clear) in world indices.

Canada's TSX Index and Canadian Dollar Roller-Coaster Ride

I last wrote about Canada's TSX Index in my post of October 10th.

The 3-Year Daily chart below shows that, since then, price bounced shortly thereafter to re-test the bearish moving average Death-Cross formation, then plunged to re-test the October low around the 13,650 level. A break and hold below this level could send this index down to its next major support around 13,000, particularly if volumes continue to build, as they have, of late.

As of today (Tuesday), the TSX is bouncing on a diverging (positive) RSI signal, but a buy signal is not being confirmed, yet, by the MACD and Stochastics indicators. As well, until the RSI rises and holds above the 50.00 level, the buying may be short-lived.


The Weekly 'Hanging-Man' formation on the USD/CAD forex pair, to which I referred in the above-mentioned post, did not confirm. Instead, after whip-sawing for several weeks, price, eventually, continued to rise to a little above its next Fibonacci resistance level of 1.1665, as shown on the following Weekly chart. None of my indicators are suggesting a reversal of the uptrend yet; rather, a continuation is suggested.


We'll see whether these current levels represent any kind of major reversal point for both the TSX and USD/CAD, or whether more weakness lies ahead...until then, we may see some increased intraday volatile moves occur in a large trading range.

Monday, 15 December 2014

Capitulation or Continued Weakness Ahead?

Most markets closed deep in the red today (Monday)...including Major World Indices, equities, commodities, and non-U.S. currencies.

We'll see if today's action represents any kind of major capitulation or whether it's a renewed sell-off in all markets...we may gain further insights from market reaction following this Wednesday's FOMC meeting, economic forecasts, and Chair press conference.


Data provided by www.indexq.org

ATRs (average trading range) (shown in white along the bottom of each of these charts below) are spiking on these Foreign ETFs...meaning, we could, either, see reversals sometime soon, or a major plunge if all hell breaks loose in markets, generally.


The following charts are shown without the ATR for clarity of price action and their current levels.


Sunday, 14 December 2014

$93.00 in the Cards for the U.S. Dollar?

$93.00 is the next major resistance level (Fibonacci confluence) for the U.S. $, as shown on the Weekly chart below.

The RSI is showing a negative divergence on this latest advance, and other indicators are overbought; however, Chaikin Money Flow is on the rise again, so the buying may not be over just yet.

$89.00 is the near-term resistance level that will need to be overcome and held to support a potential advance to the next level.


Saturday, 13 December 2014

SPX Cliff-Hanger

I last wrote about the SPX in my post of December 3rd.

Here's a Daily chart of the most recent market action on the SPX as of Friday's close. Price ended around the near-term support level of 2000. You will note that this level sits at a confluence of price and channel support, which has been broken on the last major swing down, during which, the Momentum indicator made a lower low. I'd say that if price re-tests the 1800 level and fails to hold, we could be looking at a possible major decline ensuing, especially if the Momentum indicator makes a lower swing low. Whether we see such a scenario happening before the end of the year remains to be seen...perhaps not until January.


The following Daily ratio chart of the SPX:VIX shows that, although the price on this has not yet made a lower swing low, the Momentum indicator has (in fact, it's made an all-time swing low), which signals further weakness ahead for the SPX and further put-buying on the VIX (in fact, it shows a spike in fear, greater than that in 2007). Also, this is the second (major) time that price has failed to hold inside the uptrending channel from the 2011 lows. As I've said in previous posts, 60.00 is the level to watch for any serious breach to, potentially, signal panic-selling of equities.


In the near-term, I'd watch market action around the 1975 level on the SPX and the 80.00-90.00 level on the SPX:VIX to see whether momentum builds in either direction from there. I'd also keep an eye on what I mentioned in my previous posts regarding:

Friday, 12 December 2014

Bubblicious!

We'll see whether my summary outlined in my post of January 2nd, 2014 manifests by the end of this year or not...
"This year may be the Year-of-the-Bubble for the Nikkei, 
the Yen, and the Nasdaq...time will tell 
whether this happens, and we'll see the extent of any damage."

From the following 3-Year Daily charts of the Nikkei, the Yen, and the Nasdaq 100, their existing long-term trends are not being confirmed by their respective indicators...suggesting a possible reversal in the cards. If we do get a reversal, the question is whether these are in bubble yet...if so, how far will they reverse?

Near-term major support for the Nikkei sits at 15,000 to 16,000; near-term major resistance for the Yen sits at 95 to 100; and near-term major support for the Nasdaq sits at 3,800 to 4,000. I'd keep a close eye on the Nikkei (which is up 103.5% during this 3-year period, as shown on the percentage gained/lost graph below) for leadership in either direction.






Wednesday, 3 December 2014

SPX Update...2150 by Christmas Day?

There are 15 trading days left until Christmas day. The SPX closed today (Wednesday) at 2074.33. If the SPX gains just 5.1 points each day until then, it will reach target resistance of 2150, as mentioned in my post of November 1st. Although the Momentum indicator is declining on the following Daily chart of the SPX and not confirming this latest rally, it's still above the zero level and has made a higher swing high, so anything's possible.


Stay tuned until Christmas...


Sunday, 30 November 2014

Oil Slick

Further to my post of November 4th, WTI Crude Oil has pierced through its next major support level of 64.50, as shown on the following Weekly chart. Also, we now have a bearish Death Cross formation on this timeframe.

Oil has been in free fall since the beginning of October. The next major support level is 50.00. However, as I mentioned in the aforementioned post, price may pop up to retest the moving average cross-over level, which is now sitting around 95.00ish, before it plunges again...although, it may have a tough time rallying above, what is now major resistance, at 75.00.