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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...
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Tuesday, October 04, 2011

YM, ES, NQ & TF..."3-Black-Crows" Pattern on a 3-Day Timeframe...

Charts which I'll be watching over the next few days and weeks are on a 3-days/candle timeframe. I've selected them on the basis of their immediate support levels which are being re-tested, as well as a couple of other tasty tid-bits which caught my attention. Furthermore, it will be interesting to see how they weather further rumours that will, no doubt, surface over the next few weeks/months regarding Europe and other world markets.

Of note, is the chartgrid below of the YM, ES, NQ & TF. As can be seen, each one has formed a "3-Black-Crows" pattern from July 22nd (in the case of the YM, ES & TF)...the NQ's pattern began on July 27th. This pattern has been tested in both directions repeatedly...we'll see how the current candle closes tomorrow, and whether or not it signals a downward continuation yet.


The next chart is the XLF, the financial ETF...what's interesting about this particular chart is a "Double Death Cross" that has now been formed by the crossing of the 50 sma (red) below the 100 sma (yellow) and the 200 sma (pink). A downside H&S target of 10.2 was within reach today before the end-of-day rally. We'll see where this candle closes tomorrow, and what becomes of the moving average cross-overs in the coming days/weeks. As I've mentioned in previous posts, a strong equities rally cannot realistically (and believably) occur without the support of a strong financial sector.


The next chart is a one-year Daily comparison chart of the S&P 500 with the XLF. Price started to separate and become much weaker on the XLF in April of this year. The spread has become much wider since July...this chart confirms my last sentence above.



The next chart is the EEM, the emerging markets ETF. Price is currently sitting on a confluence of a -1 deviation level of a longer-term uptrending regression channel which started in October 2007, a shorter-term downtrending regression channel which began in April of this year, and a price support level of 35.00. Today, price nearly reached the next support level of 33.00. Volumes are building on this ETF and we'll see where the candle closes tomorrow.


Since I keep hearing various fund managers on TV recommend that investors look to emerging markets in which to place their money, it will be interesting to see how it performs against the S&P 500 over the next six months. In fact, it has not weathered the downturn from April nearly as well as the S&P 500 as shown on the 6-month Daily comparison chart below...and that spread is widening. This does not look like a safe, stable instrument in which I would responsibly invest...if I were an investor.



The next chart is the DBC, the commodities ETF. Price is currently sitting on a the 200 sma and is in between a resistance level of 28.00 and a support level of 24.00. Price was unable to rise above a downtrending line that began in July 2008 this year, and has fallen along with the equities markets.


The last chart is a six-month Daily comparison chart of the S&P 500 with DBC...as can be seen, each one has taken turns as to leader and laggard since April of this year, and they are nearly "at par" at the moment. We'll see whether they continue to move "in tandem" over the next few days/weeks, or which one outperforms the other...definitely one to watch in combination with the others above.