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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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Events

UPCOMING (MAJOR) ECONOMIC EVENTS...
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* 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

Friday, December 21, 2012

Money Flow for December Week 3

Further to my last weekly market update, this week's update will look at:
  • 6 Major Indices
  • 9 Major Sectors
  • Index/Volatility Ratio Charts
  • 30-Year Bonds
  • U.S. $

6 Major Indices


Inasmuch as today (Friday) was a Quadruple Options Expiration, I'm showing the following chartgrid, where each candle represents a 1-month options expiration period. You can see that the current candle, which closed today, basically, bounced at/near the mid-Bollinger Band. Price is stuck within a sideways range and is at/near major resistance.

We may see some retracement on the next candle, which begins on Monday, before these indices either attempt to break out of and hold above this range to, potentially, rally to their upper Bollinger Band, or retreat to lower levels, such as their lower Bollinger/50 sma confluence major support levels. You will note that the Dow Transports is already at its upper Bollinger Band and the Russell 2000 is just below.

I'd watch the Russell 200 for either leadership in a push upwards or a pullback.


The following Year-to-date Weekly chartgrid shows the extent of this week's gains, as does the following 1-Week percentage gained/lost graph.

The largest gains were made in the Dow Transports and Russell 2000 Indices.



9 Major Sectors


The first chartgrid also depicts a 1-month options expiration period, with the current candle closing today. You can see that all sectors retraced some or all of the prior period's pullback. They are all in either longer or shorter-term sideways ranges, and are also at/near major resistance, with Consumer Discretionary, Consumer Staples, Healthcare, and Technology leading in overall gains from the 2009 lows.

We may also see some retracement on the next candle, which begins on Monday, before these indices either attempt to break out of and hold above this range to, potentially, rally to their upper Bollinger Band, or retreat to lower levels, such as their lower Bollinger/50 sma confluence major support levels.

I'd watch the Consumer Discretionary and Staples, Healthcare, and Technology Sectors for either continued leadership in a push upwards or a pullback.


The following Year-to-date Weekly chartgrid shows the extent of this week's gains/losses, as does the following 1-Week percentage gained/lost graph.

The largest gains were made in the Financials Sector, while Consumer Staples lost some ground.



Index/Volatility Ratio Charts


Normally I'd show Daily charts, but have opted to show the following 2-Year Weekly ratio charts comparing the SPX, RUT, and NDX to their respective Volatility Indices.

You can see that each one closed roughly in the middle of its weekly candle, after a week of what was particularly high volatility for the SPX...basically indicating indecision and lack of commitment in either direction in these markets. The SPX:VIX and NDX:VXN ratio pairs closed below major resistance (broken horizontal blue line), while the RUT:RVX ratio pair closed just above.

With volumes expected to be lower overall next week during the Christmas holidays, we could actually see an increase in volatility with large moves and little follow-through...probably something we'll continue to see until a deal is (presumably) reached before the end of the year on the "Fiscal Cliff" issue.




30-Year Bonds


The Weekly chart below of 30-Year Bonds shows that price also finished near the middle of this week's candle and is back in the middle of a longer-term sideways trading range from mid-May...so, there is no indication of panic selling in these bonds, yet.

 

U.S. $


The Weekly chart below of the U.S. $ shows that price finished near the top of this week's candle and at the Volume Profile POC (point of control) for the past 5 years. It's been in a 2-point trading range since mid-September, and remains the risk-on/risk-off trade, along with 30-Year Bonds.


In summary, we may continue to see volatile intraday/overnight swings with little follow-through on lower volumes, until the "Fiscal Cliff" issue is settled and until the end of the year, as fund managers re-organize their portfolios for the 2012 year-end and Q4. At the moment, equity markets still appear to be hedged in Bonds and the U.S. $ as they trade near major resistance levels...this will likely continue until a convincing and sustained breakout occurs in equities. As well, I continue to watch the Fed monetary stimulus program "canaries" and the 1.3250ish resistance level on the EUR/USD forex pair as possible indicators of equity weakness that may become a cause for concern by bulls...at the moment, they are signalling caution, as I discussed in those two articles this week.

Merry Christmas and have a safe and Happy Holiday week. Good luck to anyone trading next week!