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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.
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Reflections

Reflections

EVENTS

Earnings Calendar: Courtesy of Yahoo! Finance
Fed's POMO Schedule: at this link
Wed. July 30 @ 8:30 am ~ GDP
Wed. July 30 @ 2:00 pm ~ FOMC meeting statement & interest rate announcement
Fri. Aug. 1 all day ~ Motor Vehicle Sales
Fri. Aug. 1 @ 8:30 ~ Unemployment Rate, et al

Saturday, 26 July 2014

Price Action in the SPX:VIX Ratio Still Volatile...

Further to my last post on the SPX:VIX ratio, price is still consolidating and we're awaiting a break one way or the other (above 180.00 or below 110.00).

Meanwhile, volatile swings continue, pushing down record-high Momentum levels...a drop below the zero level (see Weekly chart below) could see a break of this weekly uptrend begin to the downside (around the 110.00 price level). However, we may see a retest of the 130.00 level on the pretext of a major breakdown followed by a surge in price action.

Buckle up!


Friday, 25 July 2014

The Shanghai Shuffle 'n Surge

China's Shanghai Index has been quietly rallying since it approached the 2000 major support level once again in mid-June, as shown on the Daily chart of SSEC below. A recent surge has pushed price above the 200 MA, while the RSI, MACD, and Stochastics indicators remained above the zero levels and continued to rise.

Near-term support sits around 2090...a hold above this level should see price continue to rally.


The following Daily ratio chart of SSEC:SPX shows a recent firming at 3-year lows and a minor push above the 50 MA (at 1.053), with rising RSI, MACD, and Stochastics above the zero level.

Near-term support sits around 1.050...a hold above this level should see price continue to strengthen against the SPX.


The following Daily ratio chart of SSEC:EEM shows a recent firming at 3-year lows below the 50 MA, while the RSI, MACD, and Stochastics remain below the zero level.

Near-term resistance sits around 47.50...a break and hold above this level should see price continue to strengthen against EEM. However, it has yet to signal that it will outperform the EEM, even though it's giving the impression that it may.


We'll see whether traders continue to hold their long positions in the SSEC for any sustained length of time or whether this was simply a short-term technical trading opportunity off a triple-bottom formation in May. Monitoring the two ratio charts above, along with their indicators, should help to clarify any continued serious strength in this index.

Friday, 18 July 2014

Canada's Inflation Rate for June 2014 Increased to 2.4%...Trend or Anomaly?

Canada's inflation rate continued to rise from 2.3% in May to 2.4% in June, as reported today by Statistics Canada.

Is this the continuation of a longer-term trend, or simply temporary? Time will tell.


As I mentioned in my post of June 20th, a break and hold below 1.065 for the USD/CAD Forex pair may cause some concern for the Bank of Canada. That level was hit last week, as shown on the following 10-Year Weekly chart before it bounced and retested a 40% Fibonacci level at 1.08 and declined to its current level 1.0736 as I write this during Friday's trading session.

This is a chart worth watching, along with my chart posted overnight of GOLD, to watch for a break and hold of one of these resistance or support levels...higher GOLD prices may include a strengthening of the Canadian Dollar against the U.S. Dollar.


GOLD - Next Hurdle is 1400

If GOLD can hold above the 1300-1330 major support level shown on the 5-Year Weekly chart below, the next resistance level is around the 1400 level.

There is a convergence of the 50-week moving average, mid-Bollinger Band, -1 deviation level of the downward-sloping channel, and the 5-Year Volume Profile POC (pink line along the right side of the chart) at this major support level.

GOLD has, generally, been under accumulation since June of 2013, although it has been trading in a large range between 1180 and 1400 since then...one to watch in the coming days/weeks, particularly in light of Thursday's major geopolitical events in the Ukraine and Israel/Gaza Strip.


Thursday, 3 July 2014

"RISK-ON" Theme to Begin Fourth of July Fireworks

Since the lows of 2009, markets have been trending upwards, generally, with a couple of pullbacks in 2010 and 2011.

From the Weekly comparison chart below of the Dow, S&P 500, Nasdaq 100, and Russell 2000 Indices, you can see how much markets have gained, percentage-wise, since those lows. The Nasdaq is in the lead, followed by the Russell, S&P, and the Dow, thanks to the Fed's monetary policy pertaining to financial price stability, inflation, and unemployment concerns.

Since Janet Yellen indicated in her speech to the IMF on July 2nd that their monetary policy does not need to deviate from those concerns, I'd expect this bull market to, basically, continue until that changes. There may be periods of volatility over the next year or two that may be influenced by world incidents, or even by month-to-month economic data, especially concerning inflation or corporate earnings, but until we see any political uncertainty arise in the markets closer to the U.S. Presidential election in 2016, we may see a steady climb continue.


The next Weekly chart is the ratio of the SPX:VIX. This week's trading closed above near-term resistance of 180.00 and Momentum made another higher (all-time) swing high. Price may fluctuate between 180.00 and 150.00 before a further climb is made, if the 180.00 level (now near-term support) is breached.


The following Daily chart of the S&P 500 E-mini Futures Index (ES) shows a steady climb upwards in its channel from the 2013 breakout towards a confluence of the channel median with a Fibonacci Fanline and a Fibonacci extension level around the 1990 or 2000 level, as I mentioned in my post of June 8th (I was a little early in my projected date of the end of June for this target).

One thing I'm noticing on this chart is the drop-off in volumes...one to watch over the coming days/weeks to see if this trend continues, whether it has any effect on this upward climb, or whether we see more volumes pour into the Nasdaq and Russell Indices to confirm a full "Risk-On" scenario. This latter scenario would become evident over time on the comparison chart above...another one to watch.


Happy Fourth of July to my U.S. friends! Have a fun and safe long weekend.


Thursday, 26 June 2014

SPX:VIX Ratio Consolidating at Record High Levels

Since my post of June 8th (wherein I noted that the SPX:VIX ratio had overshot its technical resistance limit, and price and Momentum had reached all-time record highs), price has been fluctuating, primarily above the 150.00 level, currently near-term support, as shown on the following 20-year Weekly ratio chart.

As long as price remains above 150.00 I'd say that buying will re-enter the SPX and push price even higher on this ratio. We'll see whether Momentum confirms, if such a scenario occurs...and, if it signals support for any sustained buying above resistance at 180.00.

The next support levels are at 140.00 and 110.00, if we see selling in the SPX. Either way, we may see a continued consolidation until price breaks and holds either above 180.00 or below 150.00...or, even some pretty large volatile swings in between 180.00 and 110.00, until a break and hold pattern is established, one way or the other.


Friday, 20 June 2014

Inflation: Alive and Well in Canada...Rate Hike Ahead?

As Canadians, we are "privileged" to live in a country plagued by -40° C temperatures, ice storms, hurricanes, and tons of snow in the winter and +30° C temperatures, flooding, tornadoes, mosquitoes, and black flies in the spring and summer...and, we live in constant threat of earthquakes along the West Coast.

Now, we are "privileged" to learn that inflation is, indeed, alive and well in Canada. This report released today from Statistics Canada shows that the Consumer Price Index (CPI) rose 2.3% in the 12 months to May, following a 2.0% increase in April...their breakdown is as follows.






In response, the Canadian Dollar is trading higher again today (Friday), as shown on the following 10-Year Weekly chart of USD:CAD. There is currently minor Fibonacci support around 1.08, while the 1.10 level has been quite "noisy" this year.

Any plunge and hold below the 1.065 major support level may pose some cause for concern on the part of the Bank of Canada, particularly if inflation continues to rise or remain elevated...if it does, we'll see whether it creeps across the border into the U.S.

So, rate hike ahead for Canada?...or, even the U.S.?


Wednesday, 18 June 2014

Spread Between Brent Crude Oil & WTIC Light Crude Oil

I last mentioned the spread between Brent Crude Oil and WTIC Light Crude Oil in this post on May 5th, 2013. At that time, price had narrowed considerably between these two.

The following 3-Year Daily ratio chart of BRENT:WTIC shows that the spread has been widening recently in favour of Brent. With the positive cross of the RSI above 50 and the positive cross-overs of the MACD and Stochastics, it would appear that this spread may continue to widen...if price can break and hold above the 50 and, possibly, 200 MAs.


The following 3-Year Daily chart of Brent shows that major resistance lies higher than current price at 117.00-119.00.


The following 3-Year Daily chart of WTIC shows that major resistance awaits at around 112.00.


With RSIs in their upper range on both of these two charts, we may see some profit-taking sometime soon...however, the RSIs aren't signalling any divergence, nor is momentum (which is above the zero level on both)...and, both are under the bullish influence of recent Golden Cross formations. The only divergence is the Stochastics on WTIC, with a negative cross-over, as well. We'll see whether the recent climb in both Brent and WTIC continues and whether the spread widens further in favour of Brent.