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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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Monday, December 19, 2011

Will Housing Data Save the Week?

Data released this morning showed a rise in the Housing Market Index, as shown on the graph below (courtesy of www.forexfactory.com). The graph shows a very soft housing market since numbers fell below 50 in 2006. There are more housing and home sales reports coming out each day this week...will see what the trend shows in those and subsequent market reaction.


In this regard, I've shown a Daily chart of the Realty ETF, ICF below. It has shown relative strength to the Major Indices the past few days...however, price dropped and closed below a near-term support level as it could  not rally above confluence resistance of the 200 sma (pink) and Year-to-date Volume Profile POC (red horizontal line)...a chart that I'll keep my eye on during the course of the week...any turnaround and rally on this ETF could have a positive effect on the Major Indices...otherwise, continued weakness will likely produce a drag on the equity markets.


Below is a Daily chart of the Financials ETF, XLF. Price broke and closed below near-term major support...a break and hold below its next confluence support level of 12.00 could send it down to 11.00.


BAC closed below its confluence support level of 5.00 today, as shown on the Daily chart below. As I noted in my post on October 3rd, major support is sitting around 2.00 on its Quarterly timeframe:
http://strawberryblondesmarketsummary.blogspot.com/2011/10/200-in-store-for-bac.html We'll see where it goes from here.


I'd be looking for a substantial drop in the YM/Dow 30 if major weakness persists in BAC and in XLF. Today, the Dow outperformed the XLF and the Russell 2000, as shown on the 1-Day 1-Minute percentage comparison chart below. The Commodities ETF, DBA, held up the best today, with ICF dropping in line with the Dow, S&P 500, and the Nasdaq 100.


Below is a 4-Hour chartgrid of the YM, ES, NQ & TF. There are now 2 out these 4 whose 50 sma (red) has crossed below the 200 sma (pink) once more to re-form a bearish Death Cross...namely, the ES & NQ...the 50 sma is presently 0.20 above the 200 sma on the TF. A break and hold below their respective lower Bollinger Bands should be sufficient to send price further down to resume their bear market movement and fill the gaps below, as shown on the 30-minute (market hours only) chartgrid below. Since the VIX closed just below 25.00 today, it will be important for the bear case for it to return and hold above that level.