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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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EVENTS

Earnings Calendar: Courtesy of Yahoo! Finance
Fed's POMO Schedule: at this link

Friday, 29 June 2012

Money Flow for June Week 4

Further to my last weekly market update, here is a summary of where money flow ended for Week 4 of June 2012.

The Weekly charts below of YM, ES, NQ & TF show that they all closed higher than the prior week (the ES, NQ & TF formed a bullish engulfing candle, while the YM came within a few ticks of forming one as it opened slightly higher than the prior candle's close)...all four on slightly lower volumes than the prior week. They've popped up and closed above the downtrending channel at their middle Bollinger Band and above the current month's Volume Profile POC (yellow horizontal line). The YM closed at its 1-Year Volume Profile POC (red horizontal dotted line along the right edge of the charts), the ES  closed slightly above, the NQ closed well above, and the TF closed just below.

They're not out of the woods yet, as a wall of resistance waits immediately above price. Any advance up to their upper Bollinger Band would likely produce some higher volumes due to short covering...I'd be worried about any sort of convincing and sustained push higher above this year's highs if volumes drop off during such an advance, as I'd wonder about the ratio of serious buying versus simple short covering (especially on overnight advances).


As I mentioned in my weekly market update of April 13th, I'm assigning a weekly bullish or bearish rating on YM, ES, NQ & TF until the end of the year. Please refer to that post for the parameters, and to the Weekly charts below. As of this past week's close, the ratings for next week are as follows:
  • YM = mildly bearish (bordering on moderately bearish)
  • ES = moderately bearish (bordering on mildly bearish)
  • NQ = mildly bullish (bordering on moderately bullish)
  • TF = mildly bearish (approaching bearish/bullish cross-over to mildly bullish)


The 4-Hour charts below of YM, ES, NQ & TF contain two sets of Fibonacci fan line drawings. Near-term horizontal support on this timeframe sits along the line which bisects both intersecting 50% Fibonacci levels...namely, 12460 for YM, 1327.50 for ES, 2578 for NQ, and 778 for TF. It's important that price hold above this level, lest they fall prey to dropping down to or below the June lows.


The Weekly chart below of the NYSE Summation Index shows that a third higher weekly close was made to confirm a BUY signal for the SPX on this timeframe, as per the Stochastics crossover. This should, however, be viewed in the context of what happens next week on the above charts, based on my comments, as noted.


The three Daily charts below depict support and resistance levels on the percentages of Stocks Above 20-Day, 50-Day, and 200-Day Averages.

Stocks Above 20-Day Averages closed higher than the prior week at 79.09%.


Stocks Above 50-Day Averages closed higher than the prior week at 60.03%.


Stocks Above 200-Day Averages closed higher than the prior week at 57.81%.


I'd conclude that, in the short term stocks are bullish, in the medium term stocks are mildly bullish, and in the longer term stocks are mildly bullish...as has been the case for the past fourteen weeks, all are still on negative watch for further potential weakness...especially as long as the Major Indices remain below near-term major resistance.

The VIX declined by 16.19%, as shown on the graph below.


Further to the comments in my last weekly market update, the Daily ratio chart below of the SPX:VIX shows that the SPX declined and retested the 50 sma, then bounced to close higher than the last swing high. After declining somewhat, the RSI, MACD, and Stochastics indicators have hooked back up again, and the MACD histogram is beginning to increase after Friday's large gap up. Major resistance sits around the 90.00 level, and near-term support at the 50 sma at 66.59.


The Daily chart below of the VIX shows that price closed just above a near-term support level of 17.00. The next major support level is 16.00, then 13.99. Most of this week's price action has been contained in June 21st's large bullish candle, which was the day after the last FOMC interest rate announcement/economic outlook/press conference...an important candle, as any advance and hold above its high  of 20.48 could send the VIX soaring...one to watch in view of major resistance hovering above the SPX and ES (and the other Major Indices), as noted in my comments above, my comments in my post of June 29th, and my comments in my post of February 28th.


As shown on the graph below of the Industry Groups, the largest gains were in Oil Services, followed by Brokers, Semis, Banks, Internet, Pharmaceuticals, Retail, and Biotech. Gold/Silver were basically flat.


As shown on the graph below of the Major Sectors, the largest gains were made in Energy, followed by Industrials, Materials, Financials, Consumer Staples, Technology, Health Care, Consumer Discretionary, and Utilities...a mixture of advances in risk and defensive sectors.


As shown on the graph below of some of the ETFs, the largest gains were made (once again) in the European Financials ETF (EUFN), followed by Emerging Markets (EEM), Chinese Financials (GXC), Agriculture (DBA), Commodities (DBC), and U.S. Financials (XLF).


The Daily charts below of EEM and the BRIC countries show that price gapped up on Friday on EEM to close above its 50 sma, and the others closed higher on Friday, as well. The Shanghai Index is still below its major support level of 2300...any further move down could send it to this year's low just below 2150 (which happens to be a three-year low). These indices are worth monitoring to see whether they advance or decline compared with the U.S. Major Indices, in particular, the Shanghai Index, in order to determine whether global confidence is increasing or decreasing in market stability at current levels (since they all face major overhead resistance)...especially in the aftermath of this week's EU Summit.


The Daily charts below provide an update on price action on DBC and AUD/USD since my last weekly market update. DBC has rallied and now sits below its 50 sma. The AUD/USD forex pair bounced around in between its 50 and 200 smas and closed at its 200 sma and below the next resistance level of 1.0274. The MACD, Stochastics, and RSI indicators are all trending up on both charts. However, they are both still trading under the bearish influences of a "Death Cross" formation, and, as such, will likely continue to exhibit volatile (and potential choppy/whippy) price action for awhile...ones to watch in the days/weeks ahead, as they will likely affect equity markets, as well.


As shown on the graph below, the largest gains were made in Oil, followed by Copper, Gold, and Silver.


The following four Weekly charts of Gold, Oil, Copper, and Silver show support and resistance levels...ones to watch, particularly Oil and Copper.





As shown on the graph below of the Major Indices, the largest gains were made by the Russell 2000, followed by the Dow Transports, the S&P 500, the Nasdaq 100, the Dow 30, and the Dow Utilities. There were gains made in the Emerging Markets ETF (EEM), the High Dividend-Paying Stocks ETF (DVY), and the Corporate Bonds ETF (JNK). The Index to continue to watch for any increasing volatility and weakness is the Russell 2000 as the "canary in the coal mine."


As shown on the currency graph below, money flowed out of the U.S. $ and Japanese Yen, and into the Aussie $, Euro, Swiss Franc, Canadian $, and British Pound.


The Daily ratio chart below of the SPX:U.S. $ shows that the SPX rallied to close just above its 50 sma at a prior swing high. Major resistance is at 17.00 and major support is at 16.00, with both the 50 and 200 smas in between...one to watch to see if buying pressure continues in equities compared to the U.S. $, and whether the MACD can cross and hold above the zero level.


The next chart of interest is the Weekly chart below of the 30-Year Bonds (ZB). Price closed just below its confluence of trendline and Fibonacci levels. but still within a high-basing consolidation range...one to watch, since the markets haven't yet completely divorced from this Bond.


FYI, and further to my last weekly market update, I would just say that a bearish "Death Cross" is nearer to forming on JPM. Here are updated lists as follows:

List #1 ~ Recent "Death Cross Formations:
  • GS
  • EEM
  • CAT
  • EUFN
  • MS
  • BID
  • GXC
  • C
List #2 ~ On Negative Watch for possible "Death Cross" Formations:
  • JNK
  • BAC
  • XLF
  • JPM
All stocks/ETFs in both lists are subject to potential volatile intraday swings, and are important ones to watch over the next days/weeks, especially as many of them are financial. Please refer to the updated Daily chartgrid below showing all the stocks/ETFs in question.


In summary, I'll be watching the Major Indices, Commodities (especially Oil and Copper), the U.S. $ and its currency counterparts, Bonds, Emerging Markets and the BRIC countries, VIX, and, of course, European countries (which I've not reffered to in this post) to see whether this past week's rally continues next week and, if so, under what circumstances (be they technical, economic, or political), and on what kind of sustainable conviction.

Enjoy your weekend!

A Review of Q2 2012

Further to my post of January 27, my post of March 30th, and my post of June 20th, I'll offer the following Quarterly timeframe charts of the Dow 30, S&P 500, Nasdaq 100, and Russell 2000 Indices to wrap up Q2 of 2012.

I mentioned on March 30th I that it would be difficult to imagine that Q2 would duplicate the bullish advance of Q2 without a pullback, since these indices had closed at major resistance levels. The Q2 candle retraced either all or much of Q2's candle on all four major indices and closed in the upper one-third portion of its candle.

If the Q3 candle retests the Q1 lows again, I'd be very skeptical of much of a convicing advance above this year's high during these three months...instead, that would signal to me that these markets would likely chop around in that candle's range until a breakout occurs one way or another...that is, barring any sort of catastrophic news which could send the markets much lower.


Looks like the bear awoke from his winter hibernation and was very hungry, just like he was the prior two years...the question this year is whether he'll hang around for Q3...time will tell as to what tantalizing tidbits may come his way to hold his interest. Stay tuned for Q3 results at the end of September...


So, already, the first layer of the bull's chocolate cake has been plundered by the bears, so there's no chance of them enjoying this cake for a 2012 Christmas tea party...instead, we'll have to wait for "Santa's 2012 Surprise" for either the bulls or the bears to enjoy. Stay tuned for Q4 results at the end of December...

Friday, 22 June 2012

Money Flow for June Week 3

Further to my last weekly market update, here is a summary of where money flow ended for Week 3 of June 2012.

The Weekly charts below of YM, ES, NQ & TF show that the YM & ES closed lower on the prior week (forming a bearish engulfing candle on both), the NQ closed slightly higher than the prior week, and the TF closed marginally higher than the prior week...all four on lower volumes than the prior week. After a brief pop outside the downtrending channel, they all closed back inside. They're all trading just above the current month's Volume Profile POC (yellow horizontal line), and below their middle Bollinger Band. The YM, ES & TF are trading below their 1-Year Volume Profile POC (red horizontal dotted line along the right edge of the charts), and above on the NQ.

I'd like to see price hold above the current month's Volume Profile POC and increasing volumes enter to confirm any potential sustainable breakout and hold above the downtrending channel, in order to launch a renewed bull move above the middle Bollinger Band, the 1-Year Volume Profile POC, and, possibly, to the upper Bollinger Band...otherwise, look for more volatile and deep intraday swings, and possibly a new low for 2012.


As I mentioned in my weekly market update of April 13th, I'm assigning a weekly bullish or bearish rating on YM, ES, NQ & TF until the end of the year. Please refer to that post for the parameters, and to the Weekly charts below. As of this past week's close, the ratings for next week are as follows:
  • YM = moderately bearish (bordering on bearish)
  • ES = bearish (bordering on moderately bearish)
  • NQ = mildly bullish
  • TF = bearish (bordering on moderately bearish)


The Weekly chart below of the NYSE Summation Index shows that a second higher weekly close was made to, potentially, confirm a BUY signal for the SPX on this timeframe, as per the Stochastics crossover. This should, however, be viewed in the context of what happens next week on the above charts, based on my comments, as noted.


The three Daily charts below depict support and resistance levels on the percentages of Stocks Above 20-Day, 50-Day, and 200-Day Averages.

Stocks Above 20-Day Averages closed slightly lower than the prior week at 62.19%.


Stocks Above 50-Day Averages closed slightly higher than the prior week at 42.27%.


Stocks Above 200-Day Averages closed slightly higher than the prior week at 51.93%.


I'd conclude that, in the short term stocks are mildly bullish, in the medium stocks are mildly bearish, and in the longer term stocks are mildly bullish (bordering on mildly bearish)...as has been the case for the past thirteen weeks, all are still on negative watch for further potential weakness.

The VIX declined by 1.15%, as shown on the graph below.


Further to the comments in my last weekly market update, the Daily ratio chart of the SPX:VIX shows that the SPX rallied, declined, then bounced to close higher than the prior week above what was a downtrending resistance line and the 50 sma. Near-term support is at the 50 sma at 66.95, followed by the 200 sma at 59.31. The RSI, MACD, and Stochastics indicators have been trending up, however, the Stochastics has hooked down in overbought territory and the MACD histogram has lost a bit of upside momentum.


The Daily chart below of the V IX shows that price closed below a major support level of 21.00. Any move higher would find some resistance at 19.00, 21.00, and finally 27.00...major support is now at 17.00, then 16.00...all important levels for the VIX relative to my comments above pertaining to any breakout and hold on the SPX above its downtrending channel, as well as the 50 sma support level on the SPX:VIX ratio chart.


As shown on the graph below of the Industry Groups, there were minor gains in the Banks, Pharmaceuticals, Biotech, and Brokers...a continuation of the prior week's accumulation. The largest losses were made in Gold/Silver, followed by Oil Services, Retail, Internet, and Semis.


As shown on the graph below of the Major Sectors, there were minor gains in Financials and Health Care. The largest losses were made in Energy, followed by Utilities, Consumer Staples, Materials, Consumer Discretionary, Industrials, and Technology...more profit-taking in some of the defensive sectors than in more risky assets (which were accumulated the prior week).


As shown on the graph below of some of the ETFs, the largest gains were made (once again) in the European Financials (EUFN), followed by Agricultural (DBA), and the U.S. Financials (XLF). The largest losses were made in the Chinese Financials (GXC), followed by Emerging Markets (EEM), and Commodities (DBC).


The Daily charts below of EEM and the BRIC countries show that price attempted to move up on EEM, Brazil and Russia, but then declined...India simply continued to consolidate...but the Shanghai Index didn't rally and, instead, fell and closed below its major support level of 2300 to rest just above its next support of 2250...a drop below this level could send it down to this year's lows just below 2150 (which happens to be a three-year low). These indices are worth monitoring to see whether they advance or decline compared with the U.S. Major Indices, in particular, the Shanghai Index, in order to determine whether global confidence is increasing or decreasing in market stability at current levels.


The Daily charts below provide an update on price action on DBC and AUD/USD since my last weekly market update. DBC dropped and closed below its bear flag in spite of diverging MACD, Stochastics, and RSI indicators. The AUD/USD forex pair broke briefly above the 1.01 resistance level, but closed below. They are both trading under the bearish influences of a "Death Cross" formation, and, as  such, will likely continue to exhibit volatile (and potential choppy/whippy) price action for awhile...ones to watch in the days/weeks ahead, as they will likely affect equity markets, as well.


As shown on the graph below, the largest losses were made in Silver, followed by Oil, Gold, and Copper.


The following four Weekly charts of Gold, Oil, Copper, and Silver show support and resistance levels...ones to watch.





As shown on the graph below of the Major Indices, the Dow Utilities lost the most, followed by the Dow Transports, Dow Industrials, S&P 500, and the Nasdaq 100, while minor gains were made in the Russell 2000. There were gains in the Corporate Bonds ETF (JNK), and losses in the Emerging Markets ETF (EEM), and the High Dividend-Paying Stocks ETF (DVY).


As shown on the currency graph below, money flowed into the U.S. $ and out of the Japanese Yen, British Pound, Aussie $, Canadian $, Swiss Franc, and the Euro.


The Daily ratio chart below of the SPX:U.S. $ shows that the SPX failed to hold onto its rally and closed just above a support level of 16.00, but below its 200 sma at 16.34, which is, once again, resistance, followed by the 50 sma at 16.63...one to watch to see if buying pressure returns in equities compared to the U.S. $, and whether the MACD can cross and hold above the zero level.


The next chart of interest is the Weekly chart below of the 30-Year Bonds (ZB). Price closed just below its confluence of trendline and Fibonacci levels, but still within a high-basing consolidation range...one to watch, since the markets haven't yet completely divorced from this Bond.


FYI, and further to my post of June 14th, I can now move BID and C out of List #2 and into List #1 of stocks/ETFs which have now experienced a bearish "Death Cross" moving average formation on their Daily timeframes (note that I moved GXC from List #2 to List #1 last week). All stocks/ETFs in what is now two lists (List #2 on "Negative Watch"),  are subject to potential volatile intraday swings, and are important ones to watch over the next days/weeks. Please refer to the updated Daily chartgrid showing all the stocks/ETFs in question.


In summary, here is the problem, and here is one solution. I won't repeat what I said in each of these two posts since each one contains a noteworthy summary, they complement one another, and the summaries in both are relevant and can be applied to what I've discussed in this post.

Enjoy your weekend!