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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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Events

UPCOMING (MAJOR) ECONOMIC EVENTS...
* Wed. Aug. 16 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Fri. Sept. 1 @ 8:30 am ET ~ Employment Data
* Wed. Sept. 6 @ 2:00 pm ET ~ Beige Book Report
* Tues. Sept. 19 ~ 2-day FOMC Meeting Begins
* Wed. Sept. 20 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
* Tues. Oct. 31 ~ 2-day FOMC Meeting Begins
* Wed. Nov. 1 @ 2:00 pm ET ~ FOMC Announcement
* Tues. Dec. 12 ~ 2-day FOMC Meeting Begins
* Wed. Dec. 13 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events

Tuesday, August 15, 2017

Volatility Ramping Up in 2017

* See UPDATES below...

Further to my post of August 10th, the following Daily chart of the VIX shows that the same number of volatility price spikes has already occurred, so far this year, as made in all of last year.

A series of higher swing highs on the RSI, since Q4 of 2015, is hinting that each price spike made, since then, was done so with greater strength. We're seeing rising wedges form on the MACD and PMO indicators, suggesting that we may see the next price spike break out to new highs this year, with much higher force behind it, sending equity prices on the SPX plunging.

Call me cynical, but it seems to me that the escalating confrontational political rhetoric coming from the White House and Washington, of late, and the ensuing fallout playing out right before our eyes, indicates a fraying, or even an unraveling, of the current administration and its agenda...and, this is being reflected in this chart. So, as I said in the above article, buckle up!


* UPDATE August 17 @ 1:00 pm ET:

And, so the fractures in the White House agenda begin, with respect to tax cuts and tax reform...

After many major business CEOs resigned from his Manufacturing Council and were about to resign from his Strategy and Policy Forum in a show of non-confidence, President Trump ended both of these advisory groups yesterday...


Following this and a variety of criticisms from members of Congress of the President's responses to the violence in Charlottesville, Virginia on Saturday (including one, thus far, questioning his competence), all U.S. Major Market Indices are not reacting favourably today...this development follows the recent failure of Congress to pass some kind of promised healthcare reform.


Watch for any break and hold below their respective consolidation zones as a sign of non-conviction by investors in the equity markets.


The VIX is spiking up, once again...


And, the SPX:VIX ratio has, again, plunged below the 200 level -- a critical support level that I mentioned here -- which could precede a panic selloff in equities, especially if it drops and holds below 150, as outlined here.


* UPDATE @ 4:00 pm ET

The Major Indices continued today's epic drop to close on their lows of the day...as you can see, several of them have now broken below their recent consolidation zone.

As I mentioned earlier today, watch how the VIX:SPX ratio reacts tomorrow (and into next week), as a drop and hold below 150 would confirm that further weakness and higher volatility are in in store for equities.


And...the political turmoil continues...


Saturday, August 12, 2017

North Korea: No Peace Without Compromise

In my humble opinion, unless North Korean Leader Kim Jong-un and President Trump agree to effectively resolve their differences to their mutual satisfaction, there will be NO peaceful resolution to NOKO's goal of nuclear armament and threats to the U.S. and its allies.

Case in point...my post entitled "The Art of Conflict Resolution" outlines a path toward peace...in other words, they both need to have one common goal...plain and simple.


On the flip side...An act of war by one side will guarantee a response of war by the other...one common goal exists in that scenario.


So, if that scenario is a possibility, why not one that encompasses an opposite peaceful common goal? In which direction will both sides focus their attention? We'll see...

Hint...Observe which option each one is most actively and vigorously pursuing and most sincerely committed to enacting...that will give you a clue as to the direction this is headed and, ultimately, the most likely outcome...actions speak louder than words.


Thursday, August 10, 2017

SPX:VIX Ratio: "Major Conflict Zone" Awaits

After today's dramatic 36-point drop in the SPX, price on the SPX:VIX ratio plunged to the upper edge of a "Major Conflict Zone" and the "Bull/Bear Line-in-the-Sand" level, as shown on the Monthly ratio chart below.

A drop and hold below this critical 150 major support level will seal the fate of increased volatility and lower prices for the SPX. The Momentum indicator has also fallen below the zero level, confirming that instability is in store for this index, for the longer term, if it stays below zero.


Each candle on the following ratio chart of SPX:VIX represents a period of One Quarter.

As of today's close, the current candle (Q3 of 2017) is forming a massive bearish engulfing candle on, not only Q2, but also Q1. The lows of both of those candles are just above this 150 major support level, so a drop and hold below that would signal extreme weakness for the balance of this year. The downtrending Momentum indicator is also confirming such weakness.

We'll see how this candle closes at the end of September, as it, along with the above monthly timeframe, could provide further insight into how well Q4 may perform.


In the meantime, I'd watch to see whether the Momentum indicator makes a lower swing low on the Weekly timeframe (see ratio chart below), as confirmation of further weakness ahead for the SPX in the medium term, should price breach the 150 level.


The Momentum indicator made an historical low on the Daily timeframe, as shown on the following ratio chart...signalling that volatility may, indeed, be ramping up in the short term...so, buckle up!


Wednesday, August 09, 2017

Welcome to the Swamp, Mr. President!

It's "non-business as usual" for Congress, in spite of what (Republican) voters expected in 2016 and were promised for 7 years by Republican politicians. 

After hearing his unseemly public spanking of President Trump's and the American people's intelligence during his speech to a Rotary Club gathering in Kentucky on Monday, it appears to me like Senate Majority Leader McConnell doesn't want to take responsibility for his party's epic failure on healthcare reform, but would rather, shamelessly, shift the blame onto the President and Americans.

Wait 'till November 2018, Mr. McConnell...if nothing's accomplished by then, watch your party power drain from the swamp. 







Friday, August 04, 2017

Markets Love Big Round Numbers

Just a "heads up" on the following Major U.S. Indices:
  • Dow 30 above 22,000 (keep an eye on the Dow leaders and laggards for clues to continued strength or weakness)
  • S&P 500 approaching 2500
  • S&P 100 approaching 1100
  • Nasdaq 100 approaching 6000 (has just over 100 points to go, but keep an eye on the powerhouse FAANG tech stocks, which are currently stuck in consolidation mode, for either breakouts or breakdowns)






FYI Aug. 4, 2017: Dow 30 Leaders and Laggards

You can see at a glance, from the chartgrid below, which of the Dow 30 stocks are outperforming (AAPL, AXP, BA, CAT, JPM, KO, MCD, MSFT, NKE, TRV, UNH, V and WMT) and which ones are underperforming (GE, IBM and XOM).

We'll see if the laggards (and ones not mentioned above) turn around anytime soon to continue to drive the Dow to new highs, as I mentioned in yesterday's post, or whether the leaders suddenly weaken...and, if so, with what force.

Source: Stockcharts.com

Thursday, August 03, 2017

What's Next for the Dow 30 Index?

My post of January 25th on the Dow 30 Index mentioned that price had reached 20,000, in spite of negative rhetoric from media pundits and some investors about an imminent implosion of markets under President Trump's economic agenda in the months leading up to the presidential election and to that date.

Yesterday, the Dow 30 broke and closed above 22,000 for the first time, setting another all-time record high. As you can see from the Monthly chart below, price has now hit the top of a long-term uptrending channel from the 2009 lows. So far, markets seem unfazed by the ongoing political gridlock and machinations in Washington.


Looking at a shorter-term Weekly timeframe (see chart below), we see that the RSI continues its uptrend, a bullish cross-over has formed on the MACD, and a bullish cross-over is about to form on the PMO...all of which signal that the bulls are still in charge.

The fact that price has touched the upper channel on the Monthly timeframe does not automatically mean that a pullback is imminent...rather, that price could, very well, continue to climb along this upper edge for some time, as it did in 2013 and 2014, albeit with, possibly, a bit more volatility than we've seen, of late.


Sunday, July 30, 2017

$65.00 in Store for Crude Oil?

* See UPDATE below...

My WAG -- IF price can rally and hold above 55.00, we could see a retest of 65.00 in short order...a pop and hold above 50.00 is, however, the first order of the day -- see the Monthly chart below of Crude Oil.

My gut currently favours the long side...of course, I'm not always right, so do your own due diligence.


* UPDATE August 11th:

In view of President Trump's proffered comments today regarding Venezuela, Oil Bears BEWARE!


Tuesday, July 18, 2017

Gridlock in Washington and the Impact on Equity Markets

Gridlock in Washington (with the utter failure to pass any kind of new healthcare reform) is the theme, so far, in 2017...with Republicans unable to agree to support their party's latest bill, which is now completely dead, and Democrats simply obstructing everything in sight.

It looks like everyone is tired and unable to do what they were elected to do.



If everyone's tired, how will this failure affect the progress of any other political items that President Trump has on his agenda?

And how will this affect equity markets for the remainder of the year? The SPX has looked pretty tired since March.

It's anyone's guess, I'd say...


Notwithstanding what I wrote on July 16th which describes new "BUY" signals in the SPX and the World Market Index, the last chart posted in that article (see Monthly chart of SPX below) shows that price is currently up against major resistance, formed by a long-term Fibonacci fanline (40%) and dating back to 1990, and is approaching an external Fibonacci retracement level of 200% at 2485 (taken from the highs of 2007 to the lows of 2009).

So, in the shorter term, we could see a "bull trap" occur prior to a decline in equity markets.

Combine this with today's announced failure of healthcare reform and the Fed's gradual removal of the low-rate punch bowl, and you can take your pick as to short-term market direction -- up, down, or sideways -- mixed signals in equity markets.


* P.S. July 24th...

However, inasmuch as the natural tendency of markets, in general, is to go up, I'd give slightly more weight to a continued advancement to the upside in today's politically uncertain environment...but, at a slower pace and with, perhaps, a bit more volatility than has been experienced, of late.

In this regard, keep a close watch on the SPX:VIX ratio, as a drop and hold below 250 will see volatility increase, and a drop and hold below 200 could see a panic selloff ensue in equities.

Monday, July 17, 2017

Where's the Froth?

Today, it's in the Chinese markets.

We'll see if today's selloff continues, in light of my comments of June 29th, and whether it eventually negatively affects other world markets.

Source: http://www.cnbc.com/world-markets-heat-map/

Source: http://www.indexq.org/

Sunday, July 16, 2017

World Market "Buy" Signal Triggered

A new "BUY" signal has just triggered on the World Market Index. I last wrote about this index on June 29th.

Price punched through 1900 (which will now need to hold as major support), the RSI has broken its latest downtrend and is back above 50, and there are new bullish crossovers on the MACD and PMO indicators, as shown on the following Daily chart.


While the SPX has broken above near-term resistance of 2450 and closed at another all-time high, it's a nano-breath away from also triggering a new "BUY" signal.

If price remains above 2450, if the RSI remains above 50, if the recent bullish crossover holds on the MACD, and if we get a bullish crossover on the PMO (imminent), we'll see this trigger erupt, as shown on the Daily chart below.


The SPX:VIX ratio has also broken above near-term resistance of 250 and closed at a new all-time high, as shown on the Daily ratio chart below.

Inasmuch as the RSI has broken its downtrend and is above 50, and bullish crossovers have formed on the MACD and PMO indicators, this ratio is confirming that a new "BUY" signal has triggered on the SPX. However, to see this through to fruition, we'll need to see price remain above 250 and volatility remain at all-time lows.


The following 1-Year Daily chartgrid of the 9 Major Sectors shows that Industrials and Materials are leading the pack, followed closely by Technology, Health Care, Cyclicals and Financials.

Utilities and Consumer Staples have slumped the past couple of months and Energy has been in a major downtrend all year. I'd keep a close watch on these three Sectors to see if buyers begin to dip their toes into these anytime soon.

If so, and, if the other six Sectors can hold their own, we will, no doubt, see more new records set in the SPX, with buying continuing in the World Market Index (the Year-to-date graph below shows that 8 of the 9 Sectors have decent to healthy gains, so far this year, while Energy is at -12.05%).



* P.S. July 16th

If we get a bull run like we had in the 1990's, then the SPX could reach 2700 by the 2020 Presidential election, as forecast in my post of November 26, 2016.

A level of 2700 represents approximately the next major long-term Fibonacci extension level (1.618%), as shown on the following Monthly chart of the SPX.


However, price is currently up against major resistance, formed by a long-term Fibonacci fanline (40%) and dating back to 1990, as shown on the Monthly chart of SPX below, and is approaching an external Fibonacci retracement level of 200% at 2485 (taken from the highs of 2007 to the lows of 2009).

So, in the shorter term, we could see a "bull trap" occur prior to a decline in equity markets...keep a close watch on the above-referenced Major Sectors for further signals and any evidence of weakening.