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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...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

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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...If the dots don't connect, gather more dots until they do...




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Thursday, June 22, 2017

Canada's TSX Index Teeters at Major Support/Restistance

After reaching all-time highs earlier this year, Canada's TSX Index has dropped to around the 15,250 level, as shown on the following Monthly chart...an important long-term major support/resistance level.

The latest drop has been halted by a very high volume spike around the 200-day moving average, shown on the Daily chart below.

This index has, historically, been tied to the price of crude oil, as can be seen on the graph below, although it didn't experience the same dramatic drop as oil did in 2014.

So, as I mentioned in my post of  June 21, if oil can regain and hold 43.50, and if the recent high-volume spike on the TSX was an indication of capitulation, we may see a rally ensue in both of these markets. Otherwise, weakness in one may drag the other down, as well...two charts worth watching in the short term.

Wednesday, June 21, 2017

Crude Oil Down 60% Since Mid-June 2014

Crude Oil has fallen a massive 60% since mid-June 2014, as shown on the following graph.

Price today (Wednesday) fell below 43.50, which I identified in my post of June 3rd as a major support level, and closed at 42.53, as shown on the Daily chart below.

Increasing volumes are either signalling continued weakness ahead, or some buying stepping in between this level and 50.00. Since another bearish moving average Death Cross has formed recently, the first scenario may be favoured in the near term.

Unless 43.50 is regained and held, we may very well see a retest of 35.00, or lower. In that case, I'd watch for any extreme volume spikes to signal a potential capitulation and price reversal.

Sunday, June 18, 2017

SPX: 100-Point Rally Ahead?

From the Monthly chart below of the S&P 500 Index (SPX), we could see it rally another 100 points, or so, to around 2525, before it stalls or a meaningful pullback occurs.

That price level would surpass a 200% external Fibonacci level at 2473.34 and intersect with a +1 standard deviation of a long-term regression channel from the 2009 lows.

June's high-wave candle on the following Monthly ratio chart of SPX:VIX shows that volatility has been creeping in, as equity traders become more cautious on the upside.

However, the Momentum indicator is at an all-time high on this timeframe, signalling that bulls remain in charge, in spite of a slight rise in volatility. As such, this ratio chart is worth monitoring, if the SPX continues its rally to new highs. Depending on how June's candle closes, along with the level of the Momentum indicator at that time, we may be able to determine future strength or weakness of the SPX.

Stay tuned...

Thursday, June 15, 2017

"Powerhouse" Profit-Taking

Since I posted my article of May 28 regarding the five FAANG stocks, we've seen some profit-taking in all of them over the past week, most notably in Netflix (NFLX), as illustrated on the 1-Month and 1-Week percentages gained/lost graphs below.

As shown on the following 1-year Daily chartgrid, three of the five are trading around their 50-day moving average, while NFLX and AAPL are now below. All five are hovering around price support.

As I mentioned in my prior article, I'd watch to see whether these stocks break, hold below their respective near-term support levels, and continue to weaken, as such a scenario could precipitate an overall weakening of U.S. equity markets, in general...or whether we see a meaningful bounce anytime soon, accompanied by sustained, decent volumes.

Saturday, June 10, 2017

The Art of "Borrowing"

I've heard it said many times that we come into this world with nothing and we leave with nothing.

I learned a valuable lesson a few years ago in my move cross-country. Since I was in the process of a major downsizing following the loss of my husband several years before that, I was finding it difficult to part with a number of items that we'd accumulated over the years...as well as still grieving his passing and the passing of our two pussycats in the past several years...my "family" of four had been reduced to a family of one (me). However, I had no choice...I had to be rigorous in my approach to the move and establishing my new life.

Then I remembered something I'd learned in the past year...something that can be of benefit to each of us...that was to simply think of items that I had accumulated as items that were only meant to be borrowed and not meant to be kept for life...this same principle can also be applied to everyone we meet (and are a part of) throughout our life (friends, loved ones, spouses, partners, children, family members, pets, etc.).

I think the key to the success of this concept of borrowing is to accept this as fact, detach as much as possible from the many emotions surrounding each treasure (item and person), and maintain a steadfast (and joyful) determination to move forward with our life and life purpose, in spite of the changes in our circumstances. We may also find it useful to think of all the things we're grateful for as we reflect on each of these items and people and to discover what we've learned from our association with them. Finally, and this relates to our items that we're selling or donating, we may think of these as items that others will "borrow," enjoy, and eventually pass on to someone else, as well.

Nothing in our lives lasts forever...good times...bad times...people...pets...things...situations, etc. Change happens, and we need to accept it, so we can grow from each experience....this is one method that can work for you to help you cope with such events.

Such an approach can keep you sane and on track with your life purpose (to move forward in a healthy manner)...I speak from experience...it certainly did for me.

Friday, June 09, 2017

Currency Mugging: British Pound Weakens Again

The British Pound has taken another beating overnight as results of the U.K. general election were released last night.

Theresa May's Conservative government lost the majority held prior to the election, and the U.K. is now left with a hung parliament.

As can be seen on the Monthly chart below of the GBP:USD Forex pair, the pound is -0.0221 as of mid-day today (Friday), and is still trading well below major resistance at 1.4000, after its meteoric plunge from 1.5000 following the Brexit vote on June 23, 2016.

The Pound had risen in anticipation of a larger Conservative majority being elected; however, given the fact that this government has now been weakened ahead of Brexit talks that will be proceeding within the next 10 days with the EU, the future strength of this currency is in limbo.

Any meaningful (and sustainable) strength would, first need to see the 1.3000 level regained, followed by 1.4000. Otherwise, I think that price will continue to bounce between 1.2000 and 1.3000 for the foreseeable future. A drop and hold below 1.2000 could see a catastrophic plunge occur.

Saturday, June 03, 2017

Crude Oil's Sweet Spot

The long-term chart below of Crude Oil shows a potential reverse Head & Shoulders pattern that has formed since the end of 2014, with a high-level tug-of-war occurring above the light green shaded area (just above a 78.6% Fibonacci retracement level and within the upper half of a declining channel) at 43.50 since mid-2016.

At the moment, we see major indecision around the 50.00 level (50 & 200-day moving averages).

A breakout and hold above the reverse H&S pattern neckline around 57.00 would be significant, inasmuch as we see a confluence of major Fibonacci, channel, and price resistance at that level. I'd call that Oil's sweet spot.

Otherwise, a break and hold below 43.50 could see price retest 35.00 (bottom of green shaded area, as well as long-term price support), or lower.

Sunday, May 28, 2017

The Surprising FAANG Powerhouse Stock

Of the five FAANG Tech stocks, Netflix (NFLX) has enormously outperformed its counterparts on a percentage-gained basis, from the beginning of 2013 onward, as shown on the following two 5-Year graphs.

NFLX continues to keep pace, percentage-wise, with the other four, as shown on the Year-to-date graph below.

I'd watch for exceptionally high volumes to drive these stocks to even higher levels at this accelerated pace for the near term, as has been the case since June of last year. Otherwise, we may see a leveling off of the buying, as was the case this past week on AAPL, as shown on the 1-Week graph below.

And, as I've mentioned in previous posts (more recently here), Technology holds the key to overall U.S. equity strength, in my opinion. Until major weakness strikes these five major tech stocks, in particular, we're likely to see that continue.

Monday, May 22, 2017

May 22: U.S. Market Sectors Turning Up the Heat

The following is a screenshot of a heatmap of the U.S. Sectors, courtesy of FinViz.com.

From the amount of green displayed, you can see which sectors and stocks that markets are favouring mid-afternoon today.


The following heatmap shows how other world markets ended the day. Brazil was the weakest, compared with other countries, and lost more ground today.

Saturday, May 20, 2017

Euro Poised to Extend Rally

Should the Euro break and hold above near-term resistance at 1.1250, it's conceivable that it could reach the next level at 1.1500, as shown on the Daily chart below.

And, should the Euro break and hold above 1.1500, it would face long-term Fibonacci resistance around the 1.1680 level, as shown on the Monthly chart below.

Once through that level, the ultimate major resistance sits at 1.2000, where it would face extreme overhead supply.

However, before we get too far ahead on such a bullish scenario, we'll have to wait and see if it can, first, make it above 1.1250. Should U.S. equities weaken substantially, under conditions as I've mentioned here and here, such a Euro rally to that level, and beyond, could materialize.

"Sell" Signal Triggered on Brazil's Bovespa Index

A new "sell" signal has triggered on all three technical indicators for Brazil's Bovespa Index (BVSP), following Thursday's "shock drop," as shown on the Daily chart below.

Near-term price resistance and support levels sit at 65,000 and 62,500, respectively, followed by longer-term support at 57,000.

Looking at a bigger-picture Monthly chart below, we see that longer-term Fibonacci resistance is around 64,400 and shorter-term Fibonacci support is around 61,800.

As is the case with longer term price support (noted above), there is a convergence of major long and short-term Fibonacci support around 57,000.

If price fails to hold above the 200-day moving average (62,276), as well as short-term Fib support at 61,800, we could see a swift drop to major Fib support at 57,000, or lower.

2nd Quarter Indecision on SPX:VIX Ratio

Each candle on the following chart of the SPX represents a period of one quarter. Much of the action on the current Q2 candle has occurred above the top one-quarter of Q1, and price is hovering above its close of 2362.72.

The Momentum indicator has been sluggish since July 2014 on this timeframe, likely caused by the rise in volatility, large price swings and inability of this index to gain traction, until its breakout two years later.

Each candle on the following SPX:VIX ratio chart represents a period of one quarter. The current Q2 candle is a high-wave candle and its range is 96 points. This is signalling extreme indecision in support (or not) going forward for equities in the face of rising high volatility.

Price on on the Q2 candle is hovering above the Q1 close of 191.004, but is below 200.00...a level which, I've contended (and written about) for some time, represents a new bull market in equities.

However, in order for price to break and stay above 200.00, volatility will need to calm down and remain low. We may need to wait and see how the Q2 candle closes at the end of June to try and gauge what market sentiment may hold for the remainder of the year. At the moment, it's anyone's guess, although you may see a last-ditch spike in price on the SPX before the Fed's next interest rate announcement and Fed Chair press conference on June 14.


Money Flow for May Week 3, 2017

From the Year-to-date comparison chart below of the 4 Major Indices, it's easy to see that the Nasdaq 100 Index has led this year's equity rally by a wide margin, while the Russell 2000 Index is, essentially flat, after a couple of foiled attempts to gain any traction.

If the aim of President Trump's proposed health care plan, deregulation on businesses, tax cuts, and tax reform is to help small business owners, market players don't seem to be buying into that because of their rejection of small-cap stocks, so far, this year, as also depicted on the Year-to-date graph of the 9 Major Indices below.

In fact, money flowed out of small caps this week (along with most of the 9 Major Indices, as shown on the 1-week graph below.

Furthermore, if the economy is doing so well and the Fed is busy raising interest rates (with the promise of more to come this year), why is the Financials sector flat this year, as shown on the following Year-to-date graph of the 9 Major Sectors?

In fact, money flowed out of Financials this week (along with most of the 9 Major Sectors, as depicted on the 1-week graph below.)

We'll see if the coming weeks present any buying opportunities for small-cap stocks and for the Financials Sector. Further weakening of these could negatively impact medium and large-caps stocks. However, Technology still holds the key to overall equity strength, in my opinion, as I described in my post of April 30.

At the moment, the Financials ETF (XLF) is threatening to break below the neckline of a Head & Shoulders pattern, as shown on the Weekly chart below. A drop and hold below 23.00 could see a swift plunge down to major support at 20.00, or lower.

P.S. May 21...

I've added the following Daily ratio chart of the XLF:SPX.

Price closed on Friday right on short-term major price and 200-day moving average support at 0.0098

A break and hold above near-term resistance at 0.0100 could see price retest prior highs, while a break and hold below current support could see price retest longer-term major support at 0.0094.

A ratio chart worth watching...

P.S. May 23...

The following end-of-day heatmap of U.S. Sectors shows that money flowed into the Financials Sector and stocks today. We'll see if this is the beginning of a new trend or just a short-term round of possible short covering.

Thursday, May 18, 2017

30-Year Bonds on the Move

Further to my post of April 10, 30-Year Bonds have gained a couple of points, as shown on the Monthly chart below.

Price now sits just above major resistance (50% Fibonacci retracement) and is poised to begin reversing the steep plunge that began in mid-2016.

Furthermore, price has now broken above the 50-day moving average of the USB:SPX ratio and is currently at the major resistance level of 0.65, as shown on the Daily ratio chart below.

Inasmuch as we're close to seeing a new "BUY" signal form on all 3 technical indicators, I'd keep an eye on this ratio to determine its strength versus equities in the coming days/weeks (particularly, in light of my comments of May 17), especially, if it breaks and holds above 0.65. If it does, its next target would be the 200-day moving average at 0.70.

As an aside, I'd add that, in the midst of the current political chaos emanating from the White House, President Trump may end up remaining in power for 4 years, but if, in the meantime, he's widely regarded by domestic and foreign political players, as well as the American public, as untrustworthy (in spite of future facts and conclusions reached on current political and intelligence investigations), his tenure could very well end up being unremarkable and devoid of any major accomplishment.

In that kind of environment, this would NOT be a wagon that equity markets could confidently hook up to in a sustainable way, without the risk of accompanying high volatility, in my opinion.

In this regard, watch for a break and hold below the 150 major support level on the SPX:VIX ratio, as well as a drop and hold below zero on the Momentum indicator, as shown on the Monthly ratio chart below.

In that case, volatility will remain elevated and we'll see larger intraday and overnight equity swings.