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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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* Thurs. Nov. 26th - U.S. Thanksgiving holiday...markets closed
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Wednesday, November 18, 2015

Political Unity...An Oxymoron

Some things never change...I wonder if they ever will? Case in point, my post of November 7th, 2012...still seems relevant today, except the U.S. National Debt has now reached $18.6 Trillion and there are even deeper differences, not only between Democrats and Republicans, but also within these parties (on issues such as the refugee crisis, as one example).

I repeat:
"The war between its own political parties is a greater threat to America 
than any threat from its enemies."

I've stopped hoping and am simply waiting to see action now...but am not holding my breath on this...perhaps the next generation will figure things out if ours isn't smart enough to do so...some legacy, eh?

Tuesday, November 17, 2015

Third Major Leg Down Ahead For Shanghai Index?

You can see my original post of July 8th and four subsequent updates covering China's Shanghai Index here for background information.

In my last update of September 8th, I noted that a bearish moving average Death Cross had formed on the Daily chart and price closed at 3170.45. Since that date, price moved sideways for over a month before it, finally, rallied to where it closed today (Tuesday) at 3604.80.

I have the following observations on the 2-year Daily chart below:
  • both gaps down in August have now been filled
  • a bearish Head & Shoulders has formed on the MACD Histogram, hinting of weakness ahead
  • price is approaching a triple confluence major resistance level around 3750 (comprised of the 200 MA, major downtrend line, and a 40% Fibonacci retracement level)
  • a re-test of a 200 MA is not uncommon after a Death Cross has formed and price usually drops  afterwards, often to new lows
I wouldn't be surprised to see some major selling come in sometime soon on this index to, possibly, take price down to around 2500, or lower (what would be Wave 5 for Elliott Wave enthusiasts).

Friday, November 13, 2015

S&P 500 Index: Naughty or Nice?

The Momentum indicator has crossed below the zero level on the following Monthly chart of the S&P 500 Index (SPX), hinting of further weakness ahead.

Major support sits around the 1700 level (confluence of the  50 MA and the 40% Fibonacci retracement level -- taken from the October 2011 lows).

Price on the following Monthly ratio chart of the SPX:VIX rallied at the end of today (Friday) to close just above the 100 level -- which is a major bull/bear line-in-the-sand level -- and, about which, I've written in numerous posts here.

The Momentum indicator is still well below the zero level, also hinting of further weakness ahead for the SPX.

Price on the following Daily chart of the World Market Index did eventually drop to re-test the 1600 level, which was mentioned as a possibility in my above-referenced posts. It, subsequently, bounced and has now fallen back and closed below what was near-term major price support (now major resistance) at 1700 and the 200 MA.

Unless we see price rally and the RSI climb back (and stay) above the 50 level, we could very well see this Index plunge back to 1600, or lower. As of now, all three indicators on this chart contain "SELL" signals...and, in fact, the RSI has now broken its recent uptrend, which, also, suggests further weakness to follow.

Unless we see major buying step in soon for the SPX and the World Market Index, equity markets may very well be in for a lump of coal for Xmas -- and, my 2015 Market Forecast may prove to be fairly accurate -- as of today, there are only six weeks until then.

These three charts should provide clues as to any strengthening or continued weakness in the coming days/weeks.

Sunday, October 11, 2015

"World Population Aging: Clocks Illustrate Growth in Population Under Age 5 and Over Age 65"

Wonder no more as to why global economic conditions are slowing down...this article, courtesy of
Carl Haub of the Population Reference Bureau, offers an excellent explanation [which re-enforces what I've previously said about Baby Boomers (downsizing) here and here]...

"World Population Aging: Clocks Illustrate Growth in Population Under Age 5 and Over Age 65"

I think the U.S. Fed's mandate to tie a 2% inflation target to their timing of a rise in interest rates is outdated and too high and needs to be seriously re-visited, in view of these facts.

Thursday, October 08, 2015

Death Cross Formation on Japan's Nikkei Index

Notwithstanding the bearish moving average Death Cross that has now formed on the Japanese Nikkei Index, all three indicators are hinting of higher prices, as shown on the 5-year Daily chart below.

At the moment, major resistance sits at 19000, while minor support is at 17000, with major support at 16000. I'd watch the RSI, in particular, to see whether it can rise (and stay) above the 50.00 level. If so, we may see price spike to 19000 before consolidating -- then, either, attempt to penetrate above (and reverse) the moving average cross-over and rally to, potentially, new highs, or drop to new lows around the 16000 level. Otherwise, a hold below 50.00 on the RSI may see price plunge as low as 16000 (or lower), first.

Friday, September 25, 2015

Fed "Double-Talk"

Just to add to confusion regarding what future direction the FOMC may take regarding whether or not to raise interest rates in 2015, we see this tweet last night...

I would just remind readers that Janet Yellen's comments last night are HER comments and are NOT the official Fed Policy Statement that was released at their last meeting on September 17th. In their Release, they stated that...

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term."           


"To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to  maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term."


"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

In my opinion, regardless of what Janet Yellen or any other FOMC member (or media pundit) may say in between their last Fed meeting and the next one, the only one that could be considered the official FOMC policy at the moment, is the one stated in their last meeting.

Thursday, September 17, 2015

What Is The Fed REALLY Saying?

Is the Fed really saying that their present economic monetary policy dictates that they treat current economic conditions like they had to in March of 2009 (re: their decision today to leave Fed Funds Rate unchanged at zero to 1/4 percent)?

If so, then what does that say about the health of U.S. banks? Does that mean they're at the same stress levels as they were in 2009?

If so, then one could rationally conclude that the S&P 500 Index should not be trading 1,323 points higher than it was at the March 2009 lows, as shown on the Monthly chart of the SPX below.

The message I'm seeing on the following Monthly ratio chart of SPX:VIX indicates that the current fear level of market participants equals that experienced back in April of 2011, when the SPX was trading at 1364 before it tumbled to 1074 and, eventually, rallied steadily  to reach all-time highs earlier this year.


Both, today's message from the Fed and information on the SPX:VIX ratio chart, are telling me that the current valuation of the SPX (at 1990) is far above where it should be. My comments (and subsequent UPDATES) noted in this previous post regarding the SPX:VIX ratio still apply and are worth monitoring over the coming days and weeks.

* Tweeted by BNN's Andrew McCreath September 18th: